Moody's rates ALCB Fund Baa2

Moody's Investors Service said it assigned a first-time Baa2 foreign-currency long-term issuer rating to the African Local Currency Bond Fund (ALCB Fund).

The outlook is stable.

The ALCB Fund is focused on developing domestic capital markets in Africa by investing in private sector bonds issued domestically in local currency, Moody's said.

It was created by Kreditanstalt fuer Wiederaufbau in 2013, which acts on behalf of the German Federal Ministry of Economic Cooperation and Development, with the development mandate of pursuing financial inclusion and capital market deepening, the agency said.

Kreditanstalt fuer Wiederaufbau is the main shareholder, owning 87% of the fund's shares, mostly in the form of redeemable shares, Moody's said.

The fund's total shares relative to total assets was 61% in 2018 and operates with a statutory limit for leverage of 40%.

The Baa2 rating balances credit strengths such as ample liquidity and demonstrated commitment of financially strong shareholders against a challenging operating environment, risks associated with large derivatives positions and the absence of contractual support enjoyed by other more highly rated supranational entities, Moody's said.

The stable outlook reflects an expectation that the fund will manage to maintain robust credit metrics consistent with its Baa2 rating through the expansion of its portfolio in the next few years, the agency said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.