Tuesday, July 20, 2021 / 07:00 AM / By InfraCredit / Header image credit: Daily Advent
The rating agencies Agusto & Co (“Agusto”) and Global Credit Ratings (“GCR”) have reaffirmed the “AAA” credit rating of Infrastructure Credit Guarantee Company Limited (“InfraCredit”), a specialized credit guarantee institution of infrastructure backed by the Nigeria Sovereign Investment Authority, GuarantCo and InfraCo Africa (Private Infrastructure Development Group companies), KfW Development Bank, Africa Finance Corporation and African Development Bank, to provide local currency guarantees and mobilize long-term debt financing term for infrastructure in Nigeria.
Assigning the highest credit rating to InfraCredit, GCR noted that “the rating is underpinned by the uniqueness of the operations of InfraCredit Guarantee Company Limited (“InfraCredit” or “the Company”) as a credit guarantee provider , and strong capitalization, liquidity, and asset quality, although offset by its self-regulatory status. Notably, InfraCredit has a strong financial profile score of 5.25, one of the highest in the financial services industry, supported by the company’s growing capital reserves, liquidity and broader balance sheet. solidity, which are complemented by a healthy culture of governance and risk management; key fundamentals underline InfraCredit’s credibility as a guarantor and more especially the sustainability of the economic model. InfraCredit increased its capital base by 64% during the reporting period, following InfraCo Africa’s equity investments and retained earnings.
The strength of the rating is also partly supported by the commitment of capital providers and the prospect of InfraCredit to sustainably grow its capital base through internally generated capital through earnings retention and injection of new capital from existing and potential equity and debt capital providers.
According to Agusto, the rating takes into account technical support, governance and capital provided by shareholders as well as GuarantCo Management Company Limited, the callable capital provider. Confirming the ‘AAA’ rating and reflecting InfraCredit’s unparalleled credit quality, Agusto & Co. asserted, “The assigned rating also reflects the quality of InfraCredit’s collateral and investment portfolios backed by a acceptable risk management, a good return on investment during the year and an experienced management team.” The affirmation of the rating reinforces the strength of InfraCredit’s transaction structuring, the quality of the collateral portfolio and the overall risk management practice, especially as it continues the history of zero delinquency, a proven quality of its instruments and debtors. Additionally, Agusto highlighted the growing diversity of the equity base, noting InfraCo Africa’s $27 million investment during the reporting period, as it reflects InfraCredit’s ability to consistently grow capital, as may be necessary to develop its guarantee portfolio.
Speaking on the rating actions, InfraCredit Managing Director/CEO Chinua Azubike said: “The concurrent affirmations of InfraCredit’s ‘AAA’ rating, with a stable outlook, by Agusto and GCR are a validation of the capacity of our balance sheet and, more importantly, the credibility of our We will continue to leverage our unique capabilities and innovative approach to deepen debt capital markets for infrastructure financing in the country, particularly as we strengthen our collaboration with national and multilateral partners to unlock blended finance and latent capital for commercially viable infrastructure projects, aimed at improving living standards and supporting inclusive growth in Nigeria.”
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- InfraCredit appoints Vivien Shobo as independent non-executive director
- Infraco Africa executives join InfraCredit Board of Directors
- InfraCredit guarantee supports TSL’s issuance of N12 billion 10-year Series 1 infrastructure bonds
- InfraCredit Completes Drawing of $10 Million AfDB 10-Year Unsecured Subordinated Facility
- TSL SPV Plc – Up to N12bn InfraCredit-backed Series 1 Infrastructure Bonds Now Open
- Agusto and GCR affirm InfraCredit’s ”AAA” long-term credit rating with stable outlook