Khartoum, Sudan: Moody’s Investors Service (“Moody’s”) has today assigned a Aa2 foreign currency long-term issuer rating to the Arab Bank for Economic Development in Africa (BADEA) with a positive outlook. This extremely high rating coincides with the 48th Anniversary of the bank’s establishment by the eighteen visionary members of the League of Arab States (LAS).
The Bank’s core focus is strengthening economic, financial and technical cooperation between the Arab and Africa regions, and the embodiment of Arab-African solidarity on foundations of equality and friendship. Since operations began in 1975, the Bank has financed over 720 public sector projects and provided more than 850 technical assistance grants across 44 Sub Saharan African (‘SSA’) countries that often struggle to attract competitive funding.
The bank has an unusually strong governance structure, whereby it can only lend to non-shareholder countries and as such BADEA serves as a trusted and highly effective catalyst for Arab development funds into Africa which is key for the shared prosperity of both regions.
Despite the perceived high-risk of the Bank’s SSA development mandate, BADEA has demonstrated impeccable underwriting quality through the zero-loss performance observed over the entirety of its 48-year history, often driven by deep-rooted relationships with governments in the region. The bank also maintains a strong and liquid investment portfolio supporting an extraordinary liquidity profile.
In addition to the strengths above, Moody’s ratings capture the extraordinary progress made in the bank’s conservative transformation process by the shareholders, board of directors and executive management team since the strategic decision to commence non-sovereign lending was taken.
Moody’s also noted that the key strengths underpinning BADEA’s Aa2 rating are (1) a very strong capital position and low leverage (2) an extremely high level of liquid resources supported by prudent liquidity management and (3) a high level of non-contractual member support from its shareholders.
The positive outlook reflects Moody’s view that a continuing improvement in BADEA’s asset performance would likely support a higher rating in the future.
“Today marks a key milestone for BADEA in the expansion of our development activities in Africa and coincides with the 48th anniversary of our founding” said H.E. Dr. Fahad Abdullah Aldossari, Board Chairman, commenting on Moody’s rating announcement. “Sub Saharan Africa remains underserved in terms of access to crucial financing – the Bank’s ambition is to leverage our own strong rating and profile, and also catalyse our partners in the Arab world and elsewhere to better serve the financing needs of both the public and private sector borrowers in this region. This Aa2, positive outlook rating from Moody’s puts us in a very strong position to raise funds at highly competitive rates and will significantly expand our capacity to lend affordably in alternative currencies that are used on the continent.” he added.
H.E. Dr. Sidi Ould Tah, Director General said “This rating marks the first step in a journey wherein BADEA will seek to establish itself as a benchmark issuer in global and regional capital markets. This Aa2 rating recognises the extraordinary capital and liquidity position of the Bank, while the positive outlook reflects the continued strengthening of our internal capabilities. The team are justly proud of this exceptional achievement, which would not have been possible without the trust and extraordinary support that we have received from our shareholders over almost five decades.”
About BADEA:
BADEA is a multilateral financial institution headquartered in Khartoum, Republic of the Sudan. The Bank – owned by 18 sovereign states, members of the League of Arab States was established on 18th February 1974 and began operations in March 1975 providing finance and technical assistance for economic development exclusively in Sub Saharan Africa. BADEA works to facilitate and catalyse the flow of Arab and other external capital and investments into Africa. Since 2015, the bank also expanded its focus on trade – both Arab-Africa trade as well as Intra-Africa trade.
The Bank is an independent International Institution enjoying full international legal status and complete autonomy in administrative and financial matters. It is governed by the provisions of its Establishing Agreement and the principles of international law.
The Bank was created for the purpose of strengthening economic, financial and technical cooperation between the Arab and African regions and for the embodiment of Arab-African solidarity on foundations of equality and friendship and remains one of the very few multilateral development banks whose mandate is to serve non-shareholder countries.
BADEA Shareholder governments: Kingdom of Saudi Arabia, United Arab Emirates, State of Qatar, State of Kuwait, Sultanate of Oman, Kingdom of Bahrain, Arab Republic of Egypt, People’s Democratic Republic of Algeria, Republic of Tunisia, Kingdom of Morocco, Hashemite Kingdom of Jordan, Republic of Lebanon, State of Palestine, Islamic Republic of Mauritania, Republic of Sudan, Arab Republic of Syria, Republic of Iraq, State of Libya.
