S&P Affirms ASDB Ratings With Stable Outlook

SINGAPORE, June 23 (Bernama) -- S&P Global Ratings has affirmed its 'AAA' long-term and 'A-1+' short-term foreign currency issuer credit ratings on the Asian Development Bank (AsDB) with stable outlook. S&P expects the AsDB to maintain its healthy liquidity position, strong funding presence and high capitalisation level. "These factors underpin our assessment of its stand-alone credit profile of 'aaa'," it said in a statement Thursday. AsDB promotes economic and social development of its members in Asia-Pacific, through loans, policy dialogues, technical assistance, equity investments, grants and guarantees. Ranked by size of purpose-related exposures, the bank is the fourth-largest multilateral lending institution that S&P rates globally, after the European Investment Bank, International Bank for Reconstruction and Development and the Inter-American Development Bank. In S&P view, AsDB's role, public policy mandate and membership support anchors its assessment of its extremely strong business profile. "Our assessment also reflects our expectation that the bank will continue to receive preferred creditor treatment, given the payment record of AsDB's borrowing members," it said. Although there have been instances of arrears by Myanmar, Nauru and Marshall Islands, the amounts were small and were eventually repaid, with interest, it said. As of Dec 31, 2015, AsDB has no sovereign and non-sovereign loans in non-accrual status. In addition, it has never written off a sovereign loan funded from its Ordinary Capital Resources. AsDB benefits from the support of its members and a diverse shareholder base. As of Dec 31, 2015, 48 members from Asia-Pacific own 63.6 per cent of the bank and 19 non-regional members own the remainder. Japan and the US have always been the AsDB's largest shareholders with 15.6 per cent and 15.5 per cent, respectively. The bank's shareholder base is diversified with eight governments owning over five per cent of the capital each. These include China (6.5 per cent), India (6.3 per cent), Australia (5.8 per cent), Indonesia (5.5 per cent), Canada (5.2 per cent) and South Korea (five per cent). Non-borrowing members have about 61 per cent of the voting rights of AsDB. "We believe this helps the bank adopt prudent lending and investments policies," said the rating firm. China, India, Indonesia, Pakistan, and the Philippines were the top five credit exposures at year-end 2015, and they combined accounted for 75-85 per cent of total loans and guarantees over the past five years. "This is offset to some extent by our expectation of continuing preferred creditor treatment and geographic diversification," it said. AsDB's total capital increased to US$17.4 billion (US$1 = RM3.85) in 2015 from US$16.9 billion in 2014. -- BERNAMA