African Trade Insurance Agency 'A' Ratings Affirmed On Criteria Revision; Outlook Remains Stable


  • Following a review of African Trade Insurance Agency (ATI) under our revised criteria for multilateral lending institutions, we are affirming our 'A' ratings on ATI and removing them from under criteria observation.
  • In our opinion, ATI's preferred creditor treatment has stabilized, which, combined with positive developments concerning membership growth, consolidates our view of its enterprise risk profile.
  • We are also affirming our 'A' financial strength rating.
  • The stable outlook reflects our expectation that over the next two years, ATI will prudently manage sovereign claims. Additionally, we expect ATI will continue consolidating its role and relevance on the continent through steady progress expanding its shareholder base and underwriting activities balanced by the strengthening of key risk management functions.
NEW YORK (S&P Global Ratings) April 2, 2019--S&P Global Ratings said today it 
affirmed its 'A' issuer credit rating and financial strength rating on African 
Trade Insurance Agency (ATI). The outlook remains stable.

At the same time, we removed the ratings from under criteria observation 
(UCO), where we placed them on Dec. 14, 2018, after publishing our revised 
multilateral lending institution (MLI) criteria. 

We affirmed our ratings on ATI based on its strong enterprise risk profile and 
adequate financial risk profile. ATI has no callable capital, so the long-term 
issuer credit rating reflects our assessment of ATI's stand-alone credit 
profile of 'a'. We outline these factors in our revised criteria, "Multilateral
Lending Institutions And Other Supranational Institutions Ratings Methodology,"
 published Dec. 14, 2018.  

The stable outlook reflects our expectation that over the next two years, ATI 
will manage sovereign claims within the 180-day recovery period threshold. 
Additionally, ATI will continue consolidating its role and relevance on the 
continent through steady progress expanding its shareholder base and 
underwriting activities. 

We could raise the ratings if ATI significantly expands its shareholder base, 
supporting exceptional market penetration in the region, and maintains a solid 
record of PCT combined with strengthening key managerial and risk functions to 
support its growth. 

We could lower the ratings if evidence of weakening shareholder support were 
to emerge, such as a reemergence of diminishing preferred creditor status, 
indicated by sizable or prolonged sovereign claims from sovereign members. 
Furthermore, ATI's role and ability to fulfil its public policy mandate could 
be constrained by significant delays in membership growth and paid-in capital 
installments, which, if not compensated by a general capital increase, could 
weigh on the rating. Also, relaxing risk constraints, without a more robust 
risk management framework in place, to support the underwriting business could 
also lead to a downgrade.  
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