The Central American Bank for Economic Integration (CABEI) has secured an S&P upgrade to AA+, capping a year of balance-sheet innovation. The move reduces funding costs, widens investor appetite and—crucially—equips the Bank to deliver more regional transport, clean energy and MSME finance on better terms, with lower risk.
S&P Global Ratings’ November action did more than lift CABEI to AA+: it affirmed the Bank’s stand-alone credit profile (SACP) at AA+, pointing to materially stronger capital and a decisive reduction in sovereign concentration—outcomes achieved through a set of first-of-their-kind Exposure Exchange Agreements (EEAs) with peer multilaterals. “This upgrade confirms our financial strength and the full confidence of our members,” said Executive President Gisela Sánchez. “It is excellent news for our 15 member countries because it enables us to channel resources under better conditions and translate those benefits into concrete savings for national budgets.”
On the technical foundations, Chief Financial Officer Humberto Rodríguez noted that the two EEAs executed in 2025—totalling US$1.15bn with CAF and the Caribbean Development Bank—addressed the key structural risk on CABEI’s balance sheet by directly diversifying exposures. “We reduced sovereign concentration from 76 percent to 66 percent of the portfolio and lifted our risk-adjusted capital well above S&P’s ‘Extremely Strong’ threshold of 23 percent,” he said. “These were the first EEAs carried out by non-AAA MDBs; CABEI originated and led them to deliver immediate, measurable capital efficiency.”
S&P also recognised CABEI’s strong liquidity, a decade-long track record of preferred-creditor treatment and broader market access in multiple currencies, alongside progress toward a potential general capital increase and the addition of new, highly rated members. With a stable outlook, the Bank now sits at the AA+ level alongside the United States, Austria, New Zealand and its partner, the Republic of China (Taiwan).
Upgrades are often discussed in basis points; the development story is bigger. “AA+ strengthens our ability to implement the 2025–2029 Institutional Strategy,” said Sánchez. “It means more competitive lending terms, larger and more innovative operations, and a deeper pipeline in priority areas such as regional transport integration, the clean-energy transition and MSME competitiveness—always with prudence and financial sustainability.”
Lower funding costs and deeper investor demand allow CABEI to originate more, structure more creatively and pass savings to public budgets across its footprint. For ministries of finance, that translates into a reduced debt-service burden; for line ministries, it compresses time-to-delivery on growth-critical projects that boost productivity and jobs.
Currency mismatches can derail otherwise sound projects. “CABEI has long provided local-currency financing under a robust asset–liability management framework,” Rodríguez explained. “The AA+ upgrade is an endorsement of that prudence and further improves our ability to intermediate local-currency funding where it delivers the most impact.” By shifting part of the funding stack into local currency, the Bank reduces borrower exposure to exchange-rate shocks, supports domestic capital-market development and protects service delivery through cycles.
With enhanced market perception and a stronger capital base, CABEI can push further on financial innovation. “The upgrade advances our agenda to deploy sustainability bonds, outcome-based bonds, guarantees and debt-for-nature swaps at greater scale,” said Sánchez. “These instruments help mobilise private capital into public priorities, multiplying impact in climate resilience, nature-positive infrastructure and digital public goods.”
Rodríguez added that portfolio risk-sharing is now a standing capability rather than a one-off. “We have signed an agreement to advance a third exposure-sharing structure with FONPLATA. Together with disciplined liquidity management and currency diversification, these tools preserve resilience while creating headroom for development lending.” CABEI’s funding strategy also reflects the Bank’s sustainability orientation; by 2025, 99 percent of issuance was ESG-labelled, widening the investor base and reinforcing alignment with member priorities.
The upgrade caps two years of disciplined financial management and governance strengthening. “We view AA+ as a platform, not an endpoint,” Sánchez said. “A potential ninth General Capital Increase and the incorporation of new, highly rated members would thicken our capital base and strengthen our shareholder quality—key steps to consolidating AA+ and building a credible path to AAA over time.” The sequencing is clear: diversified risk today, larger paid-in capital tomorrow and an even stronger platform for transformational finance thereafter.
Borrowers will notice the difference in both access and design. “The combination of lower funding costs and higher market confidence enables us to expand guarantees, take a measured increase in risk appetite for innovative climate operations and capitalise project preparation more effectively,” Sánchez explained. “That means faster progress on regional corridors, cleaner grids delivered sooner and MSME programmes scaled with better risk-sharing.”
For the finance function, the delivery model is anchored in optimisation. “We will continue to manage capital and liquidity for resilience while using targeted innovations to unlock impact,” Rodríguez said. “That includes selective local-currency loans, structured co-financings and instruments that crowd in private investors without compromising our risk standards.”
Economic growth is built on momentum: projects that start on time, supply chains that work, firms that can finance inventory and expansion. “CABEI is the gearbox in that engine,” Sánchez observed. “AA+ enlarges it. Transport integration becomes more bankable when the financier at the centre can syndicate larger tranches and offer longer tenors. Clean-energy pipelines accelerate when we anchor sustainability programmes and bring in commercial partners. MSME lending scales when guarantees stretch bank risk limits and local-currency lines protect cash flows.”
These are not abstract benefits. They translate into faster road links that cut logistics costs for exporters; grid upgrades that reduce outages and attract manufacturing; climate-smart agriculture that lifts rural incomes; and formalised finance for small firms that employ the majority. For treasuries, lower net interest costs and reduced FX volatility are fiscal dividends that can be redeployed to health, education and climate resilience.
Upgrades shape expectations—and unlock participation. “AA+ tells global markets that our governance, capital and risk culture meet the highest standards short of AAA,” said Sánchez. “It tells member countries that we can deliver more—and more efficiently—against their priorities. And it signals to peer DFIs and institutional investors that CABEI is a reliable partner for complex regional operations where collective action is essential.”
From the balance-sheet chair, Rodríguez underscored the focus on continuity. “The stable outlook reflects the expectation that member support and preferred-creditor treatment will continue, while we maintain prudent capital management and a high-quality liquidity portfolio. Our job is to keep that foundation strong as we scale impact.”
CABEI’s AA+ upgrade is a financial milestone with direct economic consequences. By attacking sovereign concentration risk through innovative EEAs, strengthening capital to “Extremely Strong” levels and broadening liquidity, the Bank has earned both lower funding costs and greater market trust. The result is a more capable institution—one that can finance regional integration, clean energy and MSME competitiveness at the pace and scale Central America requires, while shielding borrowers from currency shocks and mobilising private capital into public priorities.
“We have the mandate, the model and now the rating to power the region’s next growth chapter,” Sánchez concluded. Rodríguez agreed: “The task ahead is to convert financial strength into projects on the ground—roads built, kilowatts delivered, firms financed—while safeguarding the resilience that got us here.”
Since founding and leading three publicly listed companies and co-founding numerous other high-growth ventures, Dr…
Tekcapital has honed a differentiated model for discovering university inventions, turning them into real businesses,…
The Africa Finance Corporation is redefining development on the continent by championing bankable, climate-resilient, and…
Under the stewardship of Samaila Zubairu, the Africa Finance Corporation has become a driving force…
With a pioneering spirit and deep-rooted Indo-Nepalese collaboration, Nepal SBI Bank Ltd. is redefining the…
Deem Finance has established itself as one of the UAE’s most progressive non-bank financial institutions…