Corporacion Financiera de Desarrollo S.A.

The stable outlook on COFIDE in the next 24 months reflects that on the sovereign rating on Peru (foreign currency: BBB/Stable/A-2; local currency: BBB+/Stable/A-2), given our view that the entity will remain the government's important financing tool in its plans to restart the domestic infrastructure sector, while the entity continues to be a key lending intermediary to SMEs. The stable outlook on COFIDE also incorporates our expectation that its intrinsic creditworthiness will remain stable, in particular with a RAC ratio of 6.0%-6.5% in 2022-2024. We could lower the ratings on COFIDE in the next 24 months following a downgrade Peru by two notches, or if we were to revise downward COFIDE's SACP by two notches to 'b'. However, such scenarios

...We expect COFIDE to continue benefiting from the Peruvian government's support. Peru remains committed to promoting economic development through the financing of small and medium enterprises (SMEs), productive sectors in the economy, and large infrastructure projects, all of which is deployed through COFIDE. Therefore, we believe there's a very high likelihood of extraordinary and timely government support in a scenario of financial distress for the entity. As result, the long-term rating on COFIDE is three notches above its stand-alone credit profile (SACP). COFIDE continues disbursing and managing funds from several government relief packages for economic recovery. These include Reactiva Per·, Fondo Crecer, and the Fondo de Apoyo Empresarial program specifically to SMEs (lending programs under the scope of Fondo de Apoyo Empresarial include FAE-MYPE, FAE-Turismo, and FAE-Agro), resulting in COFIDE's high and diverse fee income....

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