Moody's on May 14 assigned Banque d'investissement et de développement de la CEDEAO, or the ECOWAS Bank for Investment and Development, a first-time B1 foreign-currency issuer rating, with a negative outlook.
The rating is based on the Togo-based development bank's very low capital adequacy, given its weak asset quality and elevated stock of nonperforming loans. The rating also factors in very low liquidity and member support, which Moody's said is weak due to large capital payments in arrears and the weak credit strength of the bank's shareholders.
However, the rating is supported by the ECOWAS Bank for Investment and Development's balance sheet, which the bank plans to grow while continuing efforts to improve risk management and reduce capital payments in arrears.
The negative outlook reflects downside risks over the medium-term evolution of the bank's finances.
The bank promotes economic integration and the development of the Economic Community of West African States, a 15-member country economic union.
