Fitch rates Banque Ouest Africaine de Développement ‘BBB’

Lomé, 12 June 2015. Fitch Ratings has assigned the West African Development Bank (BOAD) a long-term issuer default rating (IDR) of ‘BBB’ with a stable outlook. In a press release issued on 11 June 2015, Fitch Ratings stated that the rating is primarily based on the strong support the Bank receives from all its shareholders.

In addition, the rating agency believes that despite a challenging sub-regional environment, BOAD’s capitalization and leverage measures are more favourable than peers, with an adjusted equity to asset ratio of 40% and a debt to equity ratio of 145.1% as at end-2014.

Fitch also notes that across the portfolio, 64% of loans are extended to or guaranteed by the 8 WAEMU sovereigns, for which BOAD enjoys preferred creditor status. In case of stress on government finance of a member country, priority will be given to the repayment of BOAD loans. As a result, BOAD has never suffered any default on its loans to WAEMU sovereigns.

Liquidity risk is well-controlled. The Bank’s access to the rediscount facility of BCEAO provides an additional buffer. BOAD has also put in place policies to control risk-taking. As regards a possible devaluation of the CFA franc (XOF) against the euro which may impact BOAD, Fitch is of the view that this scenario is unlikely.

The rating assigned by Fitch generally confirms that of Moody’s assigned on 15 May 2015. The positive appreciation by these two major rating agencies consolidates the sub-regional bank in its resolve to increase presence in the international capital markets. Indeed, BOAD intends to have facilities to better support the member countries of the West African Economic and Monetary Union (WAEMU) in their drive towards economic emergence. In its 2015-219 strategic plan, BOAD has set as objective to be “a solid development bank for economic integration and transformation in West Africa”.

Established in 1973, the West African Development Bank (BOAD) is the common development finance institution of the eight member countries of the West African Economic and Monetary Union (WAEMU) including Benin, Burkina, Côte d’Ivoire, Guinea Bissau, Mali, Niger, Senegal and Togo. These countries along with the Central Bank of the West African States (BCEAO) form the category of regional shareholders. The category of non-regional shareholders includes Germany, Belgium, China, France, India, Morocco, African Development Bank and European Investment Bank. This strong shareholding provides today greater credibility for the institution at international level. The share capital of BOAD stands at XOF1,155 billion.

Its registered office is based in Lomé, Togo.