President, Dr. Warren Smith, speaks to the media about the reason for and the implications of the latest action by Standard & Poor's Rating Services (S&P). New Standard and Poor's Rating for CDB The Caribbean Development Bank (CDB) is naturally disappointed that following a review under its revised criteria for multilateral lending institutions, Standard & Poor's Rating Services (S&P) has lowered CDB's long-term foreign currency issuer credit rating from AA+ to AA, with a negative outlook. However there is much that is positive in the review which affirms that CDB has taken the correct steps to manage institutional risk in areas which are within its control. S&P indicated that the ratings reflect CDB's "strong" business profile and its "very strong" financial profile, as defined by the revised S&P criteria, in addition to S&P's expectation for extraordinary shareholder support through callable capital from higher-rated sovereign shareholders. S&P noted CDB's high capitalisation which even after adjustment for concentration exposure was stated to be higher than that of many other multilateral lending institutions and the cornerstone of CDB's "very strong" financial profile. S&P also commented favourably on CDB's new risk management framework and its funding and liquidity outlook, noting in particular the steps taken by CDB to eliminate rollover risk, matters that had been stated by S&P to be of concern at the last review. CDB's business profile was assessed as "strong", reflecting CDB's public policy mandate governance structure and shareholder support. This support was stated to have been adversely impacted by the uncustomary late payment of debt service by one borrowing member. CDB expects the traditionally good support from all its shareholders, in the form of timely payment of capital subscriptions and/or debt service to be maintained. The negative outlook reflects embedded risks, perceived by S&P, in CDB's public sector loan portfolio. CDB will continue to work with its borrowing members on ways to respond to the economic and social challenges facing them. CDB remains a very strong financial institution which is committed to its mandate of the economic growth and development of its borrowing members and to achieving the best results for all its stakeholders.