Scope Ratings reviews its ratings either yearly, or every six months in the case of sovereigns, sub-sovereigns and supranational organisations. Scope performs monitoring reviews to determine whether outstanding ratings remains proportionate. Monitoring reviews are conducted either by performing a portfolio review in terms of the applicable methodology/ies, latest developments, and the rated entity’s financial and operational aspects relative to similarly rated peers; or through targeted reviews on an individual credit. Scope publicly announces the completion of each monitoring review on its website.

Scope completed the monitoring review for the Council of Europe Development Bank (AAA/Stable; S-1+/Stable) on 17 March 2021. This monitoring note does not constitute a rating action nor indicates the likelihood of a credit rating action in the short term. The latest information on the credit ratings in this monitoring note along with the associated rating history can be found on www.scoperatings.com.

Key rating factors

Scope’s assignment of the Council of Europe Development Bank’s (CEB) AAA-rating reflects the supranational’s highly rated key shareholders, a strong liquidity position, very high asset quality and its increasing strategic importance particularly for EU member states. The CEB’s counter-cyclical mandate to provide lending for projects with a social and/or environmental focus in its member states as well as its role in the context of the coronavirus pandemic, raises the strategic importance of the bank for its key shareholders, resulting in a very supportive political environment. At the same time, Scope notes that the institution’s high and rising leverage compared to other supranational peers and its reliance on fewer shareholders for exceptional support, if ever needed, remain challenges. A downgrade of its key shareholders coupled with a deterioration of the bank’s operational performance pose medium-term risks. The Stable Outlook reflects Scope’s assessment of the CEB’s financial buffers to withstand external and balance-sheet-driven shocks.

The methodology applicable for the reviewed rating(s) and/or rating Outlook(s) (Supranational Entities, 11 November 2020) is available on https://www.scoperatings.com/#!methodology/list.
This monitoring note is issued by Scope Ratings GmbH, Lennéstraße 5, D-10785 Berlin, Tel +49 30 27891-0.
Lead analyst Alvise Lennkh, Executive Director

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