CORPORACION FINANCIERA DE DESARROLLO SA
Fitch Ratings has assigned a 'BBB+' final rating to
The final rating follows a review of the final terms and conditions conforming to information already received when Fitch assigned the expected rating on
The notes, for a final amount of
The net proceeds of the offering will be used to partially pay the consideration for the tender offer, accrued and unpaid interest on the 2022 notes and the 2025 notes validly tendered and accepted by COFIDE (and not withdrawn), and to pay the expenses of the tender offer (with any remaining proceeds being used for general corporate purposes).
KEY RATING DRIVERS
The final rating assigned to COFIDE's new issuance is aligned to COFIDE's Long-Term Foreign Currency Issuer Default Rating (IDR), as Fitch believes the probability of default is the same. The notes will rank at all times pari passu in right of payment with all of the issuer's future unsecured and unsubordinated obligations.
COFIDE's ratings reflect Fitch's expectation that the entity would receive support from the Peruvian government if needed. Although there is no explicit guarantee, Fitch's opinion takes into account that COFIDE plays a critical role in implementing development policy, is majority state owned, and has operational and financial synergies with the public administration.
COFIDE is a key element in fulfilling some of the Peruvian government's major goals for infrastructure, economic and social development. The entity has a significant role in the execution of policies by serving sectors with limited access to funding or lending resources to projects underserved by commercial banks. During 2020, COFIDE has been acting as the manager of key funds the Peruvian government created to support the economy and the small and medium-sized enterprises (SMEs) after the coronavirus outbreak, further supporting Fitch's opinion on the entity's relevant policy role.
Although COFIDE's ratings are based solely on Fitch's assessment of expected government support, the financial profile is relevant to the agency's appreciation of the support propensity. In Fitch's view, COFIDES's financial performance could experience some pressures due to the economic effects from the coronavirus pandemic. Its already modest profitability (operating profit to RWAs of 0.0% as of
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive rating action/upgrades:
The ratings for COFIDE's senior unsecured debt would move in line with COFIDE's IDRs. COFIDE's ratings will mirror any potential change in
Factors that could, individually or collectively, lead to negative rating action/downgrades:
Although not a baseline scenario, the ratings could change if Fitch perceives a decrease in the bank's strategic importance to the government's public policies.
BEST/WORST CASE RATING SCENARIO
International scale credit ratings of Financial Institutions and Covered Bond issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of four notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from '
DATE OF RELEVANT COMMITTEE
REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING
The principal sources of information used in the analysis are described in the Applicable Criteria.
PUBLIC RATINGS WITH CREDIT LINKAGE TO OTHER RATINGS
COFIDE's ratings are driven by the expected support of
RATING ACTIONS
ENTITY/DEBT RATING PRIOR
senior unsecured
LT BBB+ New Rating BBB+(EXP)
VIEW ADDITIONAL RATING DETAILS
Additional information is available on www.fitchratings.com
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