San Antonio-based North American Development Bank, or NADBank, had its overall credit rating of Aa for long-term bonds affirmed last week.
Fitch Ratings Inc. affirmed the bank’s credit worthiness and described the investment for the bond market at-large as stable. The ratings agency noted that NADBank had “controlled asset growth, which supports its continued excellent capital position, despite delays in capital payments from the U.S. and a strengthening in the bank’s risk management practices.”
The bank’s equity-to-adjusted-assets and guarantees ratio as of December 2018 was 33.3 percent.
NADBank lends to a range of borrowers, which may include municipalities along the border, and much of its loans involve infrastructure projects in that region. Its delinquency ratio was as low as 1.4 percent as of December 2018, according to the ratings agency.
Fitch’s rating for NADBank’s loan book also improved, to Bbb from Bb-, stemming from improvements in how it assess credit risk.
The credit ratings agency noted that “delays in capital payments signal low support from the U.S. government through capital increases” despite otherwise solid relationships with local governments. The ratings agency does not anticipate the bank being recapitalized in 2019, according to its recent opinion.
NADBank issued its first green bonds in July 2018. Its managing director, Alex Hinojosa, told the Business Journal that it was a wise choice for the organization because about 87 percent of its existing loans already qualify and green bonds are a hot commodity on the open market.
Political leaders who support NADBank filed legislation again this year seeking to get the bank recapitalized, which it has not been able to accomplish under the Trump administration.
Source San Antonio Business Journal