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The MLI Sector's Focus Remains On Capital Optimization, Says Supranationals Special Edition 2024

ENGLEWOOD (S&P Global Ratings) Oct. 31, 2024--Multilateral lending institutions' (MLIs) focus on capital optimization continues as the sector works to address recommendations from the G20 following its review of MLIs' capital adequacy frameworks, said S&P Global Ratings in "Supranationals Special Edition 2024," published today. Some MLIs are more advanced--with meaningful implications for balance sheets--than others.

"The sector's capital optimization transactions, which vary in terms of types of instruments and as a share of the overall balance sheet, underpin a nascent broader shift toward an originate-to-share business model," said S&P Global Ratings credit analyst Alexis Smith-Juvelis.

Blended finance will continue to be an important financing mechanism that will support private-sector capital mobilization efforts. A few MLIs are also exploring concessional blended structures that we believe will be crucial to supporting projects in low-income countries. We believe that scaling concessional sources and blending these into projects will allow MLIs to augment the loss-absorbing qualities that are required to unlock additional financing in difficult markets.

In terms of our capital assessments for MLIs, they remain robust as the sector continues to carefully manage its capital ratios.

"Supranationals Special Edition 2024" includes summaries of rated supranationals, our criteria for rating supranationals, rating histories, and comparative data. We also published the report's introduction and comparative data tables (see "Introduction To Supranationals Special Edition 2024" and "Supranationals Edition 2024: Comparative Data For Multilateral Lending Institutions").

This report does not constitute a rating action.

The report is available to RatingsDirect subscribers at www.capitaliq.com. If you are not a RatingsDirect subscriber, you may purchase a copy of the report by sending an e-mail to research_request@spglobal.com. Ratings information can also be found on S&P Global Ratings' public website by using the Ratings search box at www.spglobal.com/ratings.

Primary Credit Analyst:Alexis Smith-juvelis, Englewood + 1 (212) 438 0639;
alexis.smith-juvelis@spglobal.com
Secondary Contact:Alexander Ekbom, Stockholm + 46 84 40 5911;
alexander.ekbom@spglobal.com
Media Contact:Jeff Sexton, New York + 1 (212) 438 3448;
jeff.sexton@spglobal.com

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