Rating Agencies, Agusto and GCR Affirm ‘AAA’ Long Term Credit Rating of InfraCredit, with Stable Outlook
For the fifth consecutive year, rating agencies, Agusto & Co (“Agusto”) and Global Credit Ratings (“GCR”) re-affirmed the “AAA” credit rating of Infrastructure Credit Guarantee Company Limited (“InfraCredit”), specialized infrastructure credit guarantee institution 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 for infrastructure in Nigeria.
In re-affirming InfraCredit “AAA” rating, GCR emphasized that the rating is hinged on InfraCredit’s strong capitalisation and leverage position, solid liquidity profile, and sound asset quality. In addition, the rating is supported by InfraCredit’s strong competitive position, in terms of its mandate and operations delivery as currently the sole infrastructure credit guarantee provider in Nigeria. Despite the challenging operating environment, GCR noted that InfraCredit displayed good growth trajectory over the review period (championing some major infrastructure projects), as portfolio size grew from three at FY20 to eight by FY21, with several other transactions in the pipeline in the current year. For the review period, InfraCredit maintained its strong financial profile score of 5.25 underpinned by InfraCredit’s healthy capital and leverage, sound and stable funding and liquidity positions and risk management practice. The strength of the rating is also supported by InfraCredit’s ESG implementation and monitoring, and sound risk profile underscored by its stringent underwriting criteria.
Assigning the highest credit rating on InfraCredit, Agusto reiterated that “the rating recognizes the capital, technical and governance support provided by InfraCredit’s equity and debt sponsors in addition to InfraCredit developmental role and strategic importance in bridging the Nigeria’s infrastructural gap. Also, Agusto stated that the rating reflects the good quality of InfraCredit guarantees and investment portfolio upheld by an acceptable risk management framework, good profitability during the review year and an experienced management team.” The affirmation of the rating reinvigorates the quality of InfraCredit guarantee portfolio underpinned by nil impaired guarantee from inception till date (on the back of stringent risk acceptance criteria and proactive monitoring) and strong and increasing capital base with adequate buffers to support guarantee portfolio growth. Agusto also assigned an ESG score of “2” to InfaCredit which denotes that environmental, social and governance issues have minimal impact on InfraCredit’s credit risk.
Speaking on the ratings outcomes, InfraCredit’s Managing Director/CEO, Chinua Azubike said, “the concurrent affirmations of InfraCredit’s “AAA” rating, with stable outlook, by Agusto and GCR for the fifth consecutive year is a testament of the positive reflection of our unique strategy, strong management team, solid balance sheet supported by our capital providers, sound quality of our guarantees and strong risk management practice with zero delinquencies till date. Equally significant, is the positive recognition of InfraCredit’s increasing ESG impact by the rating agencies. Despite the challenging operating environment underpinned by the macro headwinds, we would continue to preserve our strong fundamentals and profitability whilst implementing our growth strategy through strategic collaborations, risk sharing partnerships and product innovation as we continue to catalyze domestic credit to the private sector for infrastructure development in Nigeria that will create jobs, reduce poverty, promote gender inclusion, protect the environment and stimulate local economic growth”.
