FMO is pleased to announce that an update of the Agreement between the Dutch State and FMO has been finalized. The Agreement has been modernized in line with the Dutch State’s guarantee framework, FMO’s regulatory environment as a bank and capital markets standards, since the last update in 2009.
Today, the Agreement has been approved by the Dutch Council of Ministers. The Agreement will become effective per 1 July 2023.
The key principles of the Agreement between the State and FMO remain the same, which include the commitment of the State to provide financial support in a timely manner to maintain FMO’s continuity and its ability to meet its financial obligations, if necessary. This ensures FMO’s continuous ability to fulfil its development mandate.
Additions to the Agreement include:
- A debt ceiling, setting the maximum aggregate amount of outstanding debt that FMO may have at any given moment, notwithstanding that the financial security obligation between the State and FMO will cover all outstanding debt at all times. The debt ceiling is set at USD 16 billion, far above FMO’s current outstanding funding of approximately USD 6 billion. The debt ceiling will be recalculated every 5 years to facilitate FMO’s growth in line with its strategic ambitions.
- An annual premium paid by FMO to the State to compensate the State for the risks under the maintenance obligation and the financial security obligation. The premium will have a minimal impact on FMO's financials and will be recalculated every 5 years based on a fixed methodology.
The mechanism for the State to provide support to FMO is clear, transparent and timely. No reporting or supervisory obligations are diluted.
FMO’s “AAA” ratings remain unchanged following the update, see links to S&P and Fitch below, and therefore continue to mirror the ratings of the Dutch State
The Ministry of Finance states that the modernization of the Agreement is an affirmation of the importance of FMO’s role in development cooperation on behalf of the Dutch State and shows the State’s intention to consistently support FMO, maintain its continuity and ensure FMO’s access to capital markets.
Michael Jongeneel, CEO at FMO: “We are thankful for the ongoing trust the Dutch State places in FMO. It confirms FMO’s position as a strong long-term partner and gives us the position we need to fulfil our mandate, focus on our strategic objectives and, foremost, create development impact by enabling entrepreneurs in our target markets.’’
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This press release contains inside information within the meaning of Article 7(1) of the EU Market Abuse Regulation
