In its press release, Moody’s highlighted IFFEd’s “robust capital adequacy, high liquidity buffers and strong support from highly-rated sovereign contributors”, noting that the facility’s guarantee commitments will not exceed its usable equity cushion and that it benefits from backing by governments with top-tier credit standing.

The rating reflects IFFEd’s innovative blended-finance model, which combines donor grants and portfolio guarantees to multiply education finance for lower-middle-income countries (LMICs) through multilateral development banks (MDBs). Moody’s emphasised that IFFEd’s approach is supported by highly rated founding contributors – the United Kingdom, Canada and Sweden – and by partnerships with MDBs such as the Asian Development Bank and the African Development Bank.

IFFEd CEO Karthik Krishnan said:

“This top-tier Aaa rating from Moody’s affirms IFFEd’s financial strength and the confidence of the international community in our model. It provides a strong foundation as we expand our work with MDB partners to unlock billions in affordable finance for education and skills.”

Moody’s stable outlook reflects expectations that IFFEd will maintain ample capital and liquidity buffers as it scales up its guarantee operations and continues to strengthen governance and risk-management systems.

The Aaa rating – the highest available – places IFFEd among a select group of global institutions with the strongest possible credit quality, underscoring its credibility as a new force in education finance.

Read the full press release here

9 August 2024

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