By Citizenship Newspaper
China Chengxin International Credit Rating Co., Ltd (CCXI) has affirmed African Export-Import Bank’s (Afreximbank) AAA issuer credit rating with a stable outlook.
The high rating reflects CCXI’s assessment of Afreximbank’s strengths including high strategic positioning, sound risk management system, flexibility in business development, very strong profitability, prudent liquidity management and very high coverage ratio of current assets on short-term debts.
Vincent Musumba, the Communications and Events Manager (Media Relations) at Afreximbank shared this in a statement on Frday.
The rating agency further said that it believed that Afreximbank’s ratings would remain stable over the next 12 to18 months, even after consideration of downside credit risks to the macroeconomic and operating environments affecting the Bank.
Reacting to the rating announcement, Mr. Denys Denya, Afreximbank’s Senior Executive Vice President, noted that the rating affirms the Bank’s systemic relevance to Africa and its prudent risk management.
He noted it will enhance funding diversification opportunities, particularly in China’s Panda bond market, supporting Afreximbank’s development mandate and trade facilitation between Africa and China.
He reiterated Afreximbank’s commitment to supporting trade finance in Africa and the Caribbean, even during challenging times. He noted the Bank’s commitment to its member states and all clients was unwavering and this resilient track record had significantly contributed to its formidable rating.
He said the Chinese rating affirmed the Bank’s preferred creditor status among its 53 member states in Africa and 13 in the Caribbean.
Mr. Denya said: “CCXI’s rating is a remarkable achievement amid a challenging operating environment, and it is a demonstration of Afreximbank’s systemic relevance to Africa and the Caribbean, our key focus regions.”
Mr. Denya added that the rating exemplified the Bank’s resilience and would enable it to leverage the breadth and depth of the Panda market as it diversifies its funding sources globally.
The CCXI rating is expected to galvanise greater support for Afreximbank’s funding plans in the Chinese market and enhance the Bank’s market presence and credit position.
In April this year, Afreximbank successfully issued its landmark inaugural Panda bond in the China Interbank Bond Market, raising RMB 2.2 billion (US $ 303 million).
The issuance was a significant success, being oversubscribed and attracting high-quality investors, which underscored strong market confidence in the Bank’s credit profile.
This pioneering transaction not only provides Afreximbank with a new source of diversified funding in Chinese Renminbi but also establishes a crucial benchmark for other African borrowers and marks a key step in deepening financial cooperation between Africa and China.
Afreximbank is a Pan-African multilateral financial institution mandated to finance and promote intra- and extra-African trade.
For over 30 years, the Bank is said to have been deploying innovative structures to deliver financing solutions that support the transformation of the structure of Africa’s trade, accelerating industrialisation and intra-regional trade, thereby boosting economic expansion in Africa.
Afreximbank is believed to be stalwart supporter of the African Continental Free Trade Agreement (AfCFTA), and has launched a Pan-African Payment and Settlement System (PAPSS) that was adopted by the African Union (AU) as the payment and settlement platform to underpin the implementation of the AfCFTA.
According to Afreximbank’s official profile, it is working with the AfCFTA Secretariat and the AU, the Bank has set up a US$10 billion Adjustment Fund to support countries effectively participating in the AfCFTA.
“At the end of December 2024, Afreximbank’s total assets and contingencies stood at over US$40.1 billion, and its shareholder funds amounted to US$7.2 billion. Afreximbank has investment grade ratings assigned by GCR (international scale) (A), Moody’s (Baa2), China Chengxin International Credit Rating Co., Ltd (CCXI) (AAA), Japan Credit Rating Agency (JCR) (A-) and Fitch (BBB-).
“Afreximbank has evolved into a group entity comprising the Bank, its equity impact fund subsidiary called the Fund for Export Development Africa (FEDA), and its insurance management subsidiary, AfrexInsure (together, “the Group”).
The Bank is headquartered in Cairo, Egypt,” the corporate profile of the bank states.
