Key Takeaways
- We expect ratings to remain stable or improve over the next two years as rated CDFIs take steps to mitigate risks from inflationary pressure and rising interest rates.
- Some higher equity ratios in 2021 may prove temporary, and thus may not be the sole factors in potential near-term rating actions.
- On lending their recent influx of capital, we expect some CDFIs’ equity to decrease relative to assets over time.
- Other credit factors such as asset quality and liquidity are likely to remain strong.
10 Aug, 2022