GCR affirms the A- international scale long term issue rating on Senior Unsecured Notes issued under the Global Medium Term Note Programme

May 13, 2021

Credit Rating Action

Johannesburg, 13 May 2021 – GCR Ratings (‘GCR’) has affirmed the A- international scale long term issue rating on the Senior Unsecured Notes issued by African Export-Import Bank (‘Afreximbank’, ‘the Issuer’) under its USD5bn Global Medium Term Note Programme (“GMTNP”), with outlook accorded as Stable.

Rated Entity / Issue	Rating class	Rating scale	Rating	Outlook / Watch
USD 5bn Global Medium Term Note Programme	Long term issue	International	A-	Stable Outlook

The Notes issued under the GMTNP are unsecured and unsubordinated obligations of the Issuer and rank at least equally with all other unsecured and unsubordinated indebtedness and monetary obligations of the Issuer. Therefore, the Notes attract the Issuer’s long-term international scale rating. The Issuer’s credit rating is A-/A2 in the long and short term respectively, which GCR affirmed and accorded a Stable outlook in July 2020.

The ratings on Afreximbank are supported by its strong status as one of the largest Multilateral Development Banks within the African region, diverse regional membership, strong mandate and track record, demonstrated preferential creditor treatment, beyond adequate capitalisation, strong risk position, diverse funding and robust liquidity. The ratings also factor in the growing track record of the Bank carrying out its countercyclical role, especially in light of the current global COVID-19 pandemic. The ratings are however constrained by the significant exposure to high risk operating environments and the relative overall creditworthiness of its member states.

The outlook on the programme and the notes are stable reflecting the rating outlook of the issuer, which in turn reflects our opinion that the Bank has capacity to carry out its mandate in light of the pandemic, supported by a strong balance sheet. We also factor in the relevance and importance of the Bank to its shareholders which we think remains high. Sustained low credit losses, coupled with capital and liquidity managed within adequate to strong levels also supports a stable outlook.

There is limited upside movement to the rating over the outlook horizon outside sustained higher capital levels. However, we may lower the ratings should we see significant reduction in the operating environment, a reduced countercyclical role, credit losses above our expectations, GCR capital ratio managed below 15%, and or deteriorating funding and liquidity position.

Analytical Contacts

Primary analyst	Simbarake Chimutanda	Financial Institutions Analyst
Johannesburg, ZA	SimbarakeC@GCRratings.com	+27 11 784 1771

Committee chair	Matthew Pirnie	Group Head of Ratings
Johannesburg, ZA	MatthewP@GCRratings.com	+27 11 784 1771

Related Criteria and Research

Criteria for the GCR Ratings Framework, May 2019

Criteria for Rating Supranational Institutions, May 2019

GCR Ratings Scales, Symbols & Definitions, May 2019

GCR Country Risk Scores, March 2021

GCR Financial Institutions Sector Risk Scores, February 2021

Ratings History

USD 5bn Global Medium Term Note

Rating class	Review	Rating scale	Rating class	Outlook	Date
Long and Short-Term issuer	Initial	International	BBB+	Stable	June 2017
Long and Short-Term issuer	Last	International	A-	Stable	July 2020

Salient Points of Accorded Ratings

GCR affirms that a.) no part of the rating was influenced by any other business activities of the credit rating agency; b.) the rating was based solely on the merits of the rated entity, security or financial instrument being rated; c.) such rating was an independent evaluation of the risks and merits of the rated entity, security or financial instrument.

The credit rating has been disclosed to African Export-Import Bank. The rating above was solicited by, or on behalf of, the rated entity, and therefore, GCR has been compensated for the provision of the rating.

African Export-Import Bank participated in the rating process via virtual management meetings, and other written correspondence. Furthermore, the quality of information received was considered adequate and has been independently verified where possible. The information received from African Export-Import Bank and other reliable third parties to accord the credit rating included:

Audited financial results of African Export-Import Bank as at 31 December 2019; and
Base Offering Memorandum relating to the USD5bn GMTN dated 30 April 2021.

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