Moody’s has assigned a rating of” Baa1 “to the west-Bank African Development. With this first notation, which falls into the category of the so-called “investment”, the West African regional institution ranks among the outset rated the continent.
The US agency Moody’s has allocated an initial rating to the West African Development Bank (BOAD). “Baa1″ to its emissions in foreign currency and in local currency, with a stable outlook
This rating, Moody’s said in a statement published Friday, May 15, reflects the liquidity position “very solid” BOAD and support “moderate” Member States (shareholders). However, it is dependent on the “low” level of capital adequacy, due to “the weak credit quality of borrowers and [to] moderate weight non-performing loans.”
Bad debts
The receivables of this type represent approximately 4.3% of the BOAD portfolio, but their coverage rate is only 91%. Their share could also grow over the coming years if, as it provides, the regional institution increased the volume of loans to the private sector. – Which owns most of the non-performing loans of the Bank
Moody’s also believes that despite the strong commitment of the States shareholders BOAD * to support it, they have a capacity “restricted to do so,” themselves being exposed to “systemic risks identical” to those of the regional institution.
Investment
The score BOAD is nonetheless one of the highest assigned by Moody’s to a regional institution in Africa. It is certainly well below that of the African Development Bank (who received an “Aaa” or the highest rating of Moody’s ranking), but it belongs to the category of the notes called “investment” and a notch above that of the African Export-Import Bank (Afreximbank), rated “Baa2″).
The notation BOAD far exceeds those of the African Development Bank Eastern (EADB), the Commercial and Development Bank for Eastern and Southern Africa (PTA Bank) and the Company for Habitat and Housing in Africa (Shelter-Afrique), all three rated ” Ba1 “(bonds called” speculative “).
This good credit rating is due to the strength and prudence with which BOAD has presented to managed its debt and liquidity indicators.
“At the end 2014, all of the cash assets of the BOAD accounted for 18% of its total assets and largely covered the repayment of debt,” Moody’s said in a statement. ” “In 2014, the paper says, short-term debt and long-term maturing debt represented 45% discounted liquid assets [BOAD]“. The agency also said that the regional institution, which has yet access to refinancing of the Central Bank of West African States (BCEAO), has never resorted to this mechanism.
commitments
Established in 1973, BOAD is 49% owned by the eight states of the Economic and Monetary Union of West Africa (UEMOA) and 45% by the BCEAO. Non-regional shareholders hold the remaining 6% of the capital – they still control a third of the representation on the Board
Since 1976, “the total amount vis-à-vis net commitments. UEMOA is around $ 4.6 billion and exceeds the $ 5.1 billion when including the Energy Development Fund ‘, or more than 5% of GDP in the WAEMU region in 2013, “said Moody’s. End of 2014, nearly 63% of its outstanding portfolio dedicated to development – $ 2.2 billion – was allocated to the financing of states
* Benin, Burkina Faso, Côte d. Ivoire, Guinea Bissau, Mali, Niger, Senegal and Togo.
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