Moody's Ratings assigns first-time A3 rating to GGSF
London, April 1o 2026 - Moody's Ratings (Moody's) assigns a long-term issuer rating of A3 to the Global Gender-Smart Fund S.A., SICAV-SIF (GGSF). The outlook is stable.
RATINGS RATIONALE
The A3 issuer rating reflects GGSF's robust capital structure, with substantial subordinated capital providing strong protection to senior noteholders, solid liquidity, and the very high credit quality of its shareholders, who provide the first-loss equity tranche and strong support for GGSF's mandate.
A multi-layered structure of junior and senior shares and subordinated notes provides meaningful loss-absorption capacity, with subordinated capital required to exceed 60% of total assets. While asset credit quality is inherently weak due to GGSF's mandate to fund women entrepreneurs and women-owned micro SMEs in emerging markets via local financial institutions, it is mitigated somewhat by broad geographical diversification, strict investment criteria and full currency hedging. Asset performance is weak, with non-performing assets (NPAs) of 5.2% in 2024 and 5.7% in 2025 (unaudited). Liquidity and funding quality is robust, underpinned by diversified institutional funding, good visibility over future cash flows, strict liquidity limits and highly liquid treasury assets.
GGSF's shareholders are very highly rated, comprising the Government of Germany (Aaa stable, via the Federal Ministry for Economic Cooperation/BMZ), Kreditanstalt fuer Wiederaufbau (KfW, Aaa stable), the Development Bank of Austria (OeEB), a wholly-owned subsidiary of Oesterreichische Kontrollbank AG (Aa1 negative), the International Finance Corporation (IFC, Aaa stable), and the Government of Sweden's (Aaa stable) International Development Cooperation Agency (SIDA). Our assessment of shareholder support also reflects the policy alignment of the DFIs with the fund's mandate. Most shareholders have been invested in the Fund since 2009, including the predecessor Microfinance Enhancement Facility (MEF).
GGSF's risk management framework is supportive of the A3 issuer rating. The Fund's governance structure and adherence to Luxembourg-regulated AIFM standards support prudent oversight of credit, liquidity and operational risks.
RATIONALE FOR THE STABLE OUTLOOK
The stable outlook reflects our expectation that GGSF's credit profile will remain resilient, underpinned by stable shareholder support, adherence to risk ratios that limit leverage and protect senior noteholders, and a measured growth trajectory.
The mission of the GGSF is to strengthen the provision of financial services to underserved women, as well as women-owned or women-led businesses in developing markets, with the aim of improving livelihoods, increasing gender balance and outreach, and promoting women's leadership.
RATIONALE FOR THE A3 RATING
MODERATE LEVERAGE AND A WELL DIVERSIFIED LOAN PORTFOLIO OFFSET BY WEAK ASSET PERFORMANCE AND LOW CREDIT QUALITY OF DEVELOPMENT RELATED ASSETS
GGSF's capital adequacy score assessed at "baa2" is underpinned by its strong first-loss equity cushion and further buffer in the form of senior shares and subordinated debt. The Fund needs to maintain conservative risk ratios, with a minimum 40% equity requirement and a combined subordinated capital requirement of at least 60% of total assets, which together provide substantial risk protection to senior noteholders. Junior shares, which are first-loss instruments with long maturities and strict redemption limits, are fully considered as useable equity in our calculations, while we consider only 50% of the nominal amount of senior shares as useable equity, because they have relatively short maturities (of up to a maximum of ten years ) and can be redeemed at maturity. We do not include the subordinated notes in our calculation of useable equity, given their generally short tenors and weaker loss-absorbing features. Development asset credit quality is assessed at "ba", constrained by the Fund's focus on supporting gender-lens microfinance and micro-SMEs through financial institutions in emerging markets. Asset performance is also weak, with an NPA ratio of 5.2% in 2024 and 5.7% in 2025, although diversification across 37 countries and concentration limits play an important role in risk mitigation.
GOOD LIQUIDITY AND FUNDING PROFILE SUPPORTED BY A STRONG GROUP OF DEVELOPMENT FINANCE INSTITUTIONS AND INSTITUTIONAL INVESTORS
Liquidity is a credit strength for GGSF. As of year-end 2025, liquid assets covered 449% of projected net cash outflows over the coming 18 months, up from 59% coverage in 2024. The very high level of liquidity at FYE2025 reflects $139.5 million of senior and subordinated note issuances in 2025 compared with $58 million net cash outflows. While we expect liquidity to normalise over the medium term, it will remain robust and likely over 100% of projected net cash flows as the fund plans to attract more private capital over the next two years, and to maintain decent headroom against its risk ratios which constrains loan disbursements. The Fund conducts regular liquidity stress tests with good headroom relative to its internal liquidity thresholds. It also maintains good visibility of cash outflows in relation to redemptions, due to the relatively short maturity of loans – the average maturity of GGSF loans to financial institutions was 37 months as of December 2025. All lending assets are fully hedged to US dollars, the Fund's reference currency, reducing FX-driven liquidity volatility.
GGSF's funding structure benefits from highly rated investors in its senior notes (including M&G Plc (A3 stable) and ASN Bank N.V. (A2 stable, deposit rating)) and growing interest from private and impact-oriented investors in its subordinated notes with Deutsche Bank AG (A1 positive, deposit rating) and Calvert Impact providing subordinated funding in 2025. Although current private sector funder diversity is limited given the Fund's early stage, it is targeting more subordinated capital and aims to grow the senior debt tranche. Together, these factors support our "baa1" assessment of liquidity and funding.
SOLID MEMBER SUPPORT FROM HIGHLY-RATED SHAREHOLDERS
Our key indicator for assessing strength of shareholder support is the weighted average shareholder rating, which acts as a proxy for shareholders' ability to provide support to the entity. GGSF benefits from a weighted average shareholder rating of Aaa with 91% of shares held by Aaa-rated institutions. Shareholders have demonstrated a long-standing commitment dating back to the Fund's predecessor – the MEF – and also contribute to the GGSF's technical assistance facility. However, the absence of contractual support such as callable capital is a constraint and limits our overall view of the strength of member support to "Medium."
ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) CONSIDERATIONS
We consider that ESG risks have a limited impact on GGSF's rating, as reflected in a Credit Impact Score (CIS) of 2. The geographical diversification of GGSF's assets limits its exposure to environmental risks, and strict investment guidelines and risk management processes offset demographic risks posed by its lending to microfinance institutions. GGSF has good governance practices, in line with its requirements as an AIFM. These factors are reflected in environmental, social and governance Issuer Profile Scores (IPS) of 2.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING
Upward pressure on GGSF's rating could result from a material strengthening of its capital adequacy as a result of additional paid-in equity from shareholders, and/or a sustained improvement in the credit quality of its development assets and asset performance.
Downward pressure on GGSF's rating could result from a sustained deterioration in credit quality of borrowers or liquidity, or from weakened shareholder support, including through redemptions or downgrades of shareholder ratings.
PRINCIPAL METHODOLOGY
The principal methodology used in this rating was Multilateral Development Banks and Other Supranational Entities published in February 2024 and available at https://ratings.moodys.com/rmc-documents/414557. Alternatively, please see the Rating Methodologies page on https://ratings.moodys.com for a copy of this methodology.
The net effect of any adjustments applied to rating factor scores or scorecard outputs under the primary methodology(ies), if any, was not material to the ratings addressed in this announcement.
REGULATORY DISCLOSURES
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This rating is solicited. Please refer to Moody's Policy for Designating and Assigning Unsolicited Credit Ratings available on its website https://ratings.moodys.com.
Regulatory disclosures contained in this press release apply to the credit rating and, if applicable, the related rating outlook or rating review.
At least one ESG consideration was material to the credit rating action(s) announced and described above. Moody's general principles for assessing environmental, social and governance (ESG) risks in our credit analysis can be found at https://ratings.moodys.com/documents/PBC_1462204.
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Zoe Jankel
VP - Senior Credit Officer
Dietmar Hornung
Associate Managing Director
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