Major MDBs Have Rating Headroom for USD480 Billion in New Lending
Major multilateral development banks (MDBs) could increase lending by nearly USD480 billion collectively before the decline in capital positions would lead to downgrades, Fitch Ratings says in a new report. Fitch does not expect MDBs to use their lending headroom in full. We assessed how much lending would be consistent with unchanged ratings for each of the 12 largest Fitch-rated MDBs,...
Quantifying Preferred Creditor Treatment by Rating Grade
The business models of Multilateral Development Banks (MDBs) depend crucially on Preferred Creditor Treatment (PCT). PCT refers to the de facto seniority that financially distressed sovereigns accord to MDBs from which they have borrowed. In an earlier paper, Risk Control (2022), we showed, in a matched sample, that the Probability of Default (PD) of MDB sovereign loans is substantially less than...
NDC Investment Summit SMIAC Investable Asset Classes Working Group
GEMs3.0 Investor and Philanthropy Consultation by Mahesh Kotecha, CFA
The global financing needs for climate initiatives are immense, with estimates indicating a shortfall of tens of trillions, particularly in Africa. Attracting private capital at scale is essential, yet a major constraint is the need for robust risk assessment data and risk migaon structures in emerging markets. The GEMS 3.0...
African default rates by rating category are similar to global sovereign default rates
There has been significant market interest in how default rates for African sovereigns compare to those for similarly-rated sovereigns in other regions, particularly as market spreads for African sovereign debt have been higher than those for other sovereigns at the same rating level. Below, we outline our review of the historical default experience which shows that default rates per rating category...
GEMs’ Enhanced Recovery Statistics Are Yet To Provide Sufficient Transparency And Quality For Detailed Analysis
PARIS (S&P Global Ratings) June 4, 2024--For the first time, the Global Emerging Markets Risk Database (GEMs) Consortium has released its default and recovery figures publicly. S&P Global Ratings' cross-practice working group on blended finance and the climate finance gap has analyzed the report, which was published March 25 and compiled using data and disclosures from multinational lending institutions (MLIs)...
Global Investors Back African NDCs as Platform to Build a World-Leading Green Technologies Manufacturing Hub
New York, September 24, 2024Global institutional investors, representing over $50 trillion in assets as universal owners, have committed to supporting Africa’s Nationally Determined Contributions (NDCs) by assisting governments in transforming them into investable, bankable projects. At the African NDC Institutional Investment Summit, held during New York Climate Week alongside the UN General Assembly, institutional investors, governments, and philanthropies explored Africa’s $3-7...