Rating Agencies, Agusto And GCR Affirm ‘AAA’ Long Term Credit Rating Of Infracredit, With Stable Outlook
Reflecting the strong fundamentals and credibility of Infrastructure Credit Guarantee Company Limited (“InfraCredit”), foremost rating agencies, Agusto & Co (“Agusto”) and Global Credit Ratings (GCR) simultaneously re-affirmed the “AAA” credit rating of the premier infrastructure guarantee company. Notwithstanding the unprecedented impact of the COVID-19 pandemic, which continues to weaken global and domestic macroeconomic outlook, InfraCredit sustained its strong risk capital and broader balance sheet, with significant headroom to underwrite further guarantees in pursuit of its mission of unlocking long term local currency infrastructure finance in Nigeria’s real sector.
Notably, InfraCredit’s “AAA” National Scale Rating, which is at par with the Nigerian Sovereign and reinforces the unparalleled credibility of its unconditional irrevocable guarantees, partly reflects the support of its shareholders and capital providers, which include the Nigeria Sovereign Investment Authority (NSIA), Africa Finance Corporation, GuarantCo (a Private Infrastructure Development Group company), and reputed multilateral institutions, including KfW Development Bank, who are committed capital providers. In addition, InfraCredit’s balance sheet and guarantee programmes are further supported under risk-sharing arrangements with the United States Agency for International Development (USAID), amongst other development finance institutions.
In arriving at its rating decision, Agusto reiterated that “the rating assigned to InfraCredit recognises its strategic importance and developmental role in the provision of local currency guarantees to enhance the credit quality of debt instruments issued to finance creditworthy infrastructure assets in Nigeria”. The foremost rating agency further noted that “the assigned rating reflects InfraCredit’s quality guarantee and investment portfolios, backed by an acceptable risk management framework, good return on investments and an experienced management team”.
Similarly, GCR emphasized, “InfraCredit’s “AAA” rating, with a stable outlook reflects its operational uniqueness as a guarantee provider, strong ownership and management profile, demonstrated financial flexibility, strong liquidity position, and profitability track record so far”. “The asset quality (in terms of issued guarantees) is sound, with nil non-performing exposure recorded from inception till date”, GCR analysts added.
Noteworthy, InfraCredit maintains the highest national scale rating accorded to any financial institution by Agusto and GCR, having recorded nil recourse on all its guarantee exposures since inception, reinforcing the quality of its obligors, ingenuity of the financing structures and strong governance oversight. Credited for its innovative approach to infrastructure financing, InfraCredit is creating capital access for infrastructure corporates in the real sector of the Nigerian economy whilst unlocking investable assets for pension funds, insurance firms and asset managers. As the premier infrastructure credit guarantee company, InfraCredit is committed to its vision of playing a catalytic role in engendering market confidence and stimulating financial inclusion for real sector-induced growth and the sustainable development of Nigeria’s economy.
Speaking on the ratings actions, InfraCredit’s Managing Director/CEO, Chinua Azubike said, “we are pleased with the simultaneous affirmations of InfraCredit’s “AAA” rating, with stable outlook, by the duo foremost credit rating agencies, Agusto and GCR. This assertion, which follows the thorough independent assessments by these reputed institutions, is a testament of our balance sheet capacity, impeccable quality of our guarantees and sound risk management practice. We would continue to adhere to global best practice in transaction structuring, governance, and market development, as we continuously strengthen our capitalization and broader capacity in pursuit of our vision to catalyze real sector growth through innovative infrastructure financing. Notwithstanding the challenges presented by the current COVID-19 pandemic, we continue to preserve our strong fundamentals, as we are committed to unlocking domestic credit to the private sector for infrastructure development that will create jobs and promote local economic growth.’’
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