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Japan Credit Rating Agency rates BRICS Bank AAA
August 20, 2019, 4:17 pm

The BRICS New Development Bank is also rated AA+ by Fitch and S&P Ratings

The first president of the New Development Bank K. V. Kamath speaks at the 2nd annual meet of the new lender in New Delhi in April 2017. In 2018, the NDB approved 17 loans totaling about $4.6 billion, building on its base of 13 loans worth $3.4 billion as of the end of 2017 [Image: BRICS Business Council]

The BRICS New Development Bank (NDB) was assigned a ‘AAA’ foreign currency long-term issuer rating with a stable outlook by Japan Credit Rating Agency, Ltd (JCR) on August 20.

In its press release, JCR stated that NDB’s ‘AAA’ rating is based on its appraisal of the strong support for the Bank’s operations by the member countries, the NDB’s solid capital base and conservative risk management framework to ensure financial soundness, and the preferred creditor status enjoyed by the bank.

“BRICS is facing enormous financial requirements in the infrastructure development and sustainable growth, and governments have clarified their policy of utilizing the NDB as the core institution for mobilizing resources in these fields. Capital payments from the five founding member countries have also made steady progress in creating a robust financial structure, and the NDB is expected to maintain a sound financial structure through conservative risk management even when its loans expand further in volume,” JCR said in their media release.

Leslie Maasdorp, the NDB’s Chief Financial Officer welcomed the rating.

“The AAA international rating is a significant milestone for the Bank that is fully owned and led by developing countries. The AAA rating from JCR combined with the AA+ from S&P and Fitch respectively reflects the strong credit quality of the Bank. Given its international credit ratings, NDB is well positioned to raise capital at competitive rates through the bond markets and ensure competitive loan pricing to our clients,” he said.

The NDB was established by Brazil, Russia, India, China and South Africa (BRICS) in 2014 to mobilize resources for infrastructure and sustainable development projects in BRICS and other emerging economies and developing countries, complementing the existing efforts of multilateral and regional financial institutions for global growth and development.

To fulfill its purpose, the NDB will support public or private projects through loans, guarantees, equity participation and other financial instruments.

The NDB plans to almost double its loan book to US$ 16 billion this year and increase its impact, as the bank seeks to broaden its global development partnerships and mobilise more institutional and private capital.

In 2018, the NDB approved 17 loans totaling about $4.6 billion, building on its base of 13 loans worth $3.4 billion as of the end of 2017. That brought the total loan book of the bank to 30 projects worth approximately US$ 8 billion by the end of last year.

The NDB has received regulatory approval for a ZAR 10 billion local currency bond programme in South Africa.

Helmo Preuss in Makhanda, South Africa for The BRICS Post

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