Above: the bank, which had another ratings firm downgrade its credit, is based in Bridgetown (CJ Photo)
By the Caribbean Journal staff
Standard & Poor’s has lowered its long-term issuer credit rating on the Caribbean Development Bank from AAA to AA+, the second high-profile downgrade for the bank in less than a month.
The bank was downgraded by Moody’s in late May.
The downgrade reflected S&P’s view that the CDB’s risk management “is not commensurate with other ‘AAA’ rated multilateral lending institutions, particularly given its size and regional economic weakness.”
“CDB has failed to comply with one of its internal liquidity policy guidelines, and borrower concentration remains high,” the ratings firm said in its rating statement.
The “stable” outlook for the bank reflected what it said was an expectation that the bank’s financial profile would remain stable, with new capital subscriptions “offsetting lower profitability seen this past year and that it will remain so in the near future.”
The CDB could receive an upgrade with strengthened risk management policies, however.
The ratings could also change — up or down — depending on new ratings criteria S&P will adopt for multilateral lending institutions later this year, it said.