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S&P downgrades CDB
BRIDGETOWN—Less than a month after Moody’s downgraded the credit ratings for the Caribbean Development Bank (CDB) by one notch from Aaa to Aa1, Standard & Poor’s has lowered the financial institution ’s prized AAA rating by one notch to AA+. However, the downgrade which came on June 12 left the long-term outlook at stable.
According to a statement by Standard and Poor’s, the downgrade was due to weakening in the CDB’s risk management, “The downgrade reflects our view that CDB’s risk management is not commensurate with other ‘AAA’ rated multilateral lending institutions, particularly given its size and regional economic weakness,” the Wall Street-based credit ratings agency cautioned.
The ratings agency also accused the CDB of having failed to comply with one of its internal liquidity policy guidelines, and borrower concentration remains high. “The stable outlook reflects our expectation that despite weaknesses in the risk management framework, the bank’s financial position will remain in line with its rated peers and that the very strong shareholder support will persist,” Standard and Poor’s said.
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