China Chengxin International Credit Rating Co., Ltd (CCXI) has assigned an ‘AAA/Stable’ rating to African Export-Import Bank (Afreximbank), recognising the Bank as a leading Multilateral Financial Institution (MFI) on the continent.
Afreximbank is the first African Multilateral Financial Institution to receive AAA rating from CCXI.
In its 2024 Credit Rating Report for African Export-Import Bank, released in Beijing on 15 January, CCXI noted that the rating considered, as key rating strengths, Afreximbank’s “very high strategic positioning; sound risk management system; agility and adaptability in business generation, very strong profitability and prudent liquidity management underpinned by a very high coverage ratio of current assets over short-term debts”.
“CCXI recognizes Afreximbank’s strategic relevance to the (African) continent and its ability to execute on its strategic goals and mandate and to meet the needs of member states at different stages of development, even during the most challenging times,” it added, stating that it believed that Afreximbank’s ratings would remain stable over the next 12 to 18 months.
Reacting to the rating announcement, Denys Denya, Afreximbank’s Senior Executive Vice President, noted that the rating represented the strongest endorsement the Bank had received from any credit rating agency and that the Bank had become one of the first African multilateral financial institutions to achieve a top credit rating grade in the Chinese market, especially on the strength of its stand-alone credit profile.
“This is, again, a testament to the Bank’s systemic relevance to the African continent; its strong delivery of its developmental mandate; its prudent risk management practices and its relentless focus on capital and liquidity over the years which have culminated in a formidable rating that provides us with new opportunities to raise competitively priced capital in China and to diversify our funding partnerships,” continued Mr. Denya.
Confirming that the Bank would continue to play a pivotal role in facilitating China-Africa trade and investment across its Member States, he highlighted the robust relationships it enjoys which illustrates how integral it has become to the achievement of the African Union’s key strategic economic programmes and initiatives, covering the continent and the diaspora, thereby integrating Global Africa.
According to Mr. Denya, the rating puts Afreximbank on a stronger footing as it embarks on fundraising activities in a relatively new capital market as we continue to leverage optimal financial resources into Africa.
He pointed out that the ‘AAA’ credit rating would give utmost assurance to the Bank’s new and existing funding partners in China to support the Bank’s fundraising activities on competitive terms and would position the Bank to pursue its developmental mandate and objectives.
Since 2019, Afreximbank has grown its assets by 28 per cent (5-year CAGR), achieving a return on average equity of 11 per cent and sustaining its capital adequacy at 25.5 per cent, on average, with the growth strongly supported by shareholders. It launched its largest general capital increase in 2021, targeting to raise US$2.6 billion by 2026, but achieved nearly 90 per cent of that target in three years in a remarkable demonstration of support from shareholders, despite volatile macroeconomic circumstances.
Afreximbank continues to enjoy strong market access and aims to diversify its funding base into new debt capital markets, on the back of its highly successful inaugural Samurai bond issuance in 2024. It will be exploring opportunities to tap into the Chinese Panda bond market in 2025 to support and facilitate accelerated trade and investment between China and Africa and to expand its existing funding partnerships.
