Fitch affirms Inter-American Development Bank

Fitch Ratings said it affirmed Inter-American Development Bank's issuer default rating at AAA and short-term rating at F1+.

The outlook is stable.

The agency said the ratings are based on the bank's strong support from highly rated non-borrowing shareholders, preferred creditor status and strong capitalization. Inter-American Development Bank's capital is majority controlled by regional member countries, amongst which the United States holds 30% of voting rights and Canada 4%.

Fitch noted that because of the localization of its operations, the bank has significant exposure to credit risk. At the end of 2005, some 81.8% of its total loan portfolio was made up of loans to speculative-grade rated countries. The bank also bears a high concentration risk, with sovereign loans to Brazil, Argentina and Mexico representing 55.9% of total lending.

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