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,...
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...
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...
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)...
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...
The SMI Africa Council (SMIAC) will host a high-level, invitation-only consultation for institutional investors and philanthropists during New York Climate Week, focused on GEMs 3.0—a groundbreaking data and analytics platform initiative aimed at scaling investments in Africa, emerging markets, and developing economies (EMDEs). This closed-door event is designed to explore new approaches to leveraging Global Emerging Markets Risk (GEMs) data...
Dear G20 Brazil Presidency and G20 Leaders, I write to you today with a profound sense of urgency, calling upon the leadership of Brazil’s G20 Presidency to reinstate the exclusion of the GEMs 2.0 (Global Emerging Markets Risk Database) recommendations implementation from the Brazil G20 agenda. This decision threatens the financial stability and development prospects of our continent, exacerbating the economic,...
Dr Hubert Danso, Chairman and CEO of Africa Investor (Ai) Group, Chair, CFA Asset Owners Council, Co-Chair SMI Africa Council. The concept of Private Capital Mobilisation (PCM) is being touted as a big part of the solution to the ever-growing SDG and climate financing gap for emerging markets and developing economies (EMDEs) requiring additional trillions annually to 2050. Development experts and...
A consortium of international financial institutions, under pressure to be more transparent with a database called GEMs, has released aggregated data on the risk of investment around the world. Some potential users of the GEMs data quickly dismissed the data as too general to be helpful. “Lacking granularity so still not useful,” commented one investment portfolio manager, an opinion shared by several...
