Fitch Ratings Affirms and Upgrades Colombian Collective Investment Fund Ratings

Fitch Ratings announced a revision and affirmation of the national credit quality and market risk sensitivity ratings for a series of Collective Investment Funds (FIC) managed by Fiduciaria Bancolombia S.A.. Fiduciaria Bancolombia is the trust and asset management arm of Bancolombia S.A. (NYSE: CIB, BVC: CIBEST), one of the largest financial institutions in Colombia and Central America.

The rating action included an upgrade for one fund and the affirmation of ratings for six others. The ratings assigned by Fitch do not constitute an opinion on the probability of the application of extraordinary liquidity management measures or the funds’ redemption risk.

Key Rating Factors

The foundation for the affirmation and revision of the ratings rests on the current profile of the FIC’s asset portfolios, investment strategies, and management policies.

Credit Quality Assessment

The credit quality ratings are derived from the weighted average credit quality of each FIC’s portfolio, with specific focus on the quality and diversification of instruments and counterparties, as well as the established investment limits. All FICs maintained a Weighted Average Credit Quality Factor (WACF) consistent with the ‘AAAf(col)’ national rating, the highest designation on the scale.

The upgrade of the FIC Renta Fija Plus credit quality rating to ‘AAAf(col)’ was attributed to the sustained stability in the investment portfolio’s credit profile. This stability led to a consistent reduction in the fund’s WACF, bringing it within the required range for the ‘AAAf(col)’ rating.

Market Risk Sensitivity

The market risk sensitivity ratings are based on the average duration of the funds, calculated by the Weighted Average Rating Factor (WARF), and the fund’s sensitivity to spread risk (MRF).

Sensitivity to Future Rating Actions

Downgrade Factors

A downgrade in the FIC’s credit quality ratings could occur if the portfolio undergoes significant changes in composition or if investment strategies are modified to increase the WACF, reflecting a lower credit quality. This applies to all FICs with the exception of those rated at Df(col), which is the minimum national scale rating.

Similarly, a downgrade in market risk sensitivity could result from significant changes in portfolio composition, duration, or spread risk, or if modifications to investment strategies increase the MRF and reflect greater sensitivity to market risk. The potential for the use of financial leverage is also a factor considered in the sensitivity assessment.

Upgrade Factors

The credit quality ratings for all FICs and the market risk sensitivity ratings for FIC Fiducuenta, FIC Fiduexcedentes, and FIC Renta Liquidez are the highest on the national scale. Therefore, a further positive rating action is not possible for these specific funds.

The market risk sensitivity rating for FIC Fidurenta and Plan Semilla could be reviewed for an upgrade if their MRF remains consistently below the thresholds established by Fitch for their current ratings.

Bancolombia S.A. Subsidiaries

Bancolombia S.A. (NYSE: CIB, BVC: CIBEST) is the parent company of a financial group with operations across Latin America. The group, now formally operating under the holding structure Grupo Cibest S.A., manages a broad range of businesses.

Key subsidiaries within the corporate structure include:

• Banistmo (Panama)
• Banco Agrícola S.A. (El Salvador)
• Grupo Agromercantil Holding (GAH), which includes Banco Agromercantil de Guatemala (BAM)
• Valores Bancolombia S.A. Comisionista de Bolsa (Securities Brokerage)
• Banca de Inversión Bancolombia S.A. Corporación Financiera (Investment Banking)
• Compañía de Financiamiento Tuya S.A. (Financial Services, Retail Credit)