Fitch Ratings has affirmed Development Bank of Namibia Limited’s (DBN) Long-Term Issuer Default Rating (IDR) at ‘BB-‘ and National Long-Term Rating at ‘AA+(zaf)’. The Outlooks are Stable.
“DBN’s ‘BB-‘ Long-Term IDR is driven by a moderate probability of support from the Namibian authorities, as expressed by its Government Support Rating (GSR) of ‘bb-‘. DBN’s Long-Term IDR and GSR are equalised with Namibia’s ‘BB-‘ Long-Term IDR. The Stable Outlook on DBN’s Long-Term IDR mirrors that on Namibia’s Long-Term IDR,” Fitch said.
The ratings agency said DBN’s National Long-Term Rating of ‘AA+(zaf)’ is equalised with that of Namibia and reflects the bank’s creditworthiness relative to that of issuers in South Africa and Namibia.
“The Stable Outlook reflects that on Namibia’s National Long-Term Rating. As is usual for development banks, Fitch does not assign a Viability Rating to DBN. This is because its business model depends on government support and in our view, its unique policy role cannot be carried out on a commercial basis.”
Fitch, however, notes, although the government is highly expected to support the DBN, its ability is constrained by its creditworthiness.
“The Namibian government has a high propensity to support DBN, in our view, reflecting the bank’s important policy role, 100% state ownership and significant share of government-guaranteed funding. However, the sovereign’s ability to provide support is constrained by its own creditworthiness, as indicated by its Long-Term IDR.”
DBN focuses on financing infrastructure, developmental and large industrial projects in strategically important sectors, and to a lesser degree, small and medium-sized enterprises (SMEs).
