KEY RATING DRIVERS
The affirmation and Stable Outlook reflect the following key rating factors:
--IIC's intrinsic strengths, including its robust capitalization, solid liquidity, and good asset quality underpin its ratings. At 44.8% as of
--IIC's liquidity is solid and the corporation has strictly complied with its internal guidelines. Liquidity compares favorably to peers, as liquid assets accounted for 44% of total assets and covered 644% of short-term borrowings at
--The estimated average rating of the corporation's loan portfolio has been stable through
--As is the case with other MDBs, the IIC is not profit oriented, though it adheres to self-imposed performance targets and internal capital generation has been sufficient to sustain the growth of its operations without jeopardizing the strength of its solvency. The IIC's return on average assets (ROAA) increased to 0.7% at
--The IIC's ratings also benefit from its relationship with the
--IIC's capital is owned by 44 countries, of which 26 are regional shareholders. Its main shareholder is
The Stable Outlook reflects Fitch's assessment that downside risks to the 'AAA' rating are currently not material. However, the negative ratings triggers that could, individually or collectively affect IIC's ratings, are the following:
--A prolonged and significant decline in capitalization related to asset losses, fast growth in operations or an increase in earnings volatility;
--A structural decline in liquidity combined with weakening market access;.
--A stress situation in a member country that significantly affects asset quality or results in transfer and convertibility restrictions.
KEY ASSUMPTIONS AND SENSITIVITIES
The ratings and Outlook are sensitive to a number of assumptions as follows:
--Fitch assumes that member countries, even if experiencing severe difficulties (such as
--Fitch also makes the assumption that despite the gradual deterioration in capitalization and leverage, those metrics will remain consistent with an 'AAA' rating.
--Finally, shareholder support is expected to remain strong as demonstrated by the swift reallocation in early 2013 of a small portion of shares previously released.
An adverse change to the above assumptions could be detrimental to IIC's ratings.
Fitch affirms IIC's ratings as follows:
--Long-term Issuer Default Rating (IDR) at 'AAA'; Outlook Stable;
--Short-term IDR at 'F1+';
--Senior unsecured certificates at 'AAA(mex)';
--Senior unsecured medium-term note program at 'AAA';
--Senior unsecured notes at 'AAA'.
Additional information is available at 'www.fitchratings.com'.
--'Rating Multilateral Development Banks' (
Rating Multilateral Development Banks
Source: Fitch Ratings
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