Agusto and GCR Affirm ''AAA'' Long Term Credit Rating of InfraCredit With Stable Outlook

Wednesday, August 06, 2020 / 06:00PM / InfraCredit / Header Image Credit: InfraCredit

Reflecting thestrong fundamentals and credibility of Infrastructure Credit Guarantee CompanyLimited ("InfraCredit"), foremost rating agencies, Agusto & Co ("Agusto")and Global Credit Ratings (GCR) simultaneously re-affirmed the "AAA" creditrating of the premier infrastructure guarantee company. Notwithstanding theunprecedented impact of the COVID-19 pandemic, which continues to weaken globaland domestic macroeconomic outlook, InfraCredit sustained its strong riskcapital and broader balance sheet, with significant headroom to underwrite furtherguarantees in pursuit of its mission of unlocking long term local currencyinfrastructure finance in Nigeria's real sector.

Notably,InfraCredit's "AAA" National Scale Rating, which is at par with the NigerianSovereign and reinforce the unparalleled credibility of its unconditionalirrevocable guarantees, partly reflects the support of its shareholders andcapital providers, which include the Nigeria Sovereign Investment Authority(NSIA), Africa Finance Corporation, GuarantCo (a Private InfrastructureDevelopment Group company), and reputed multilateral institutions, includingKfW Development Bank, who are committed capital providers. In addition,InfraCredit's balance sheet and guarantee programmes are further supportedunder risk-sharing arrangements with the United States Agency for InternationalDevelopment (USAID), amongst other development finance institutions.

In arriving at itsrating decision, Agusto reiterated that "the rating assigned to InfraCreditrecognises its strategic importance and developmental role in the provision oflocal currency guarantees to enhance the credit quality of debt instrumentsissued to finance creditworthy infrastructure assets in Nigeria". Theforemost rating agency further noted that "the assigned rating reflectsInfraCredit's quality guarantee and investment portfolios, backed by anacceptable risk management framework, good return on investments and anexperienced management team".

Similarly, GCRemphasized, "InfraCredit's "AAA" rating, with a stable outlook reflects itsoperational uniqueness as a guarantee provider, strong ownership and managementprofile, demonstrated financial flexibility, strong liquidity position, andprofitability track record so far". "The asset quality (in terms of issuedguarantees) is sound, with nil non-performing exposure recorded from inceptiontill date", GCR analysts added.

Noteworthy,InfraCredit maintains the highest national scale rating accordedto any financial institution by Agusto and GCR, having recorded nilrecourse on all its guarantee exposures since inception, reinforcing thequality of its obligors, ingenuity of the financing structures and stronggovernance oversight. Credited for its innovative approach to infrastructurefinancing, InfraCredit is creating capital access for infrastructure corporatesin the real sector of the Nigerian economy whilst unlocking investable assetsfor pension funds, insurance firms and asset managers. As the premierinfrastructure credit guarantee company, InfraCredit is committed to its visionof playing a catalytic role in engendering market confidence and stimulatingfinancial inclusion for real sector-induced growth and the sustainabledevelopment of Nigeria's economy.

Speaking on theratings actions, InfraCredit's Managing Director/CEO, Chinua Azubike said, "weare pleased with the simultaneous affirmations of InfraCredit's "AAA" rating,with stable outlook, by the duo foremost credit rating agencies, Agusto andGCR. This assertion, which follows the thorough independent assessments bythese reputed institutions, is a testament of our balance sheet capacity,impeccable quality of our guarantees and sound risk management practice. Wewould continue to adhere to global best practice in transaction structuring,governance, and market development, as we continuously strengthen ourcapitalization and broader capacity in pursuit of our vision to catalyze realsector growth through innovative infrastructure financing. Notwithstanding thechallenges presented by the current COVID-19 pandemic, we continue to preserveour strong fundamentals, as we are committed to unlocking domestic credit tothe private sector for infrastructure development that will create jobs andpromote local economic growth."

AboutInfraCredit

InfraCredit is a 'AAA' rated specialisedinfrastructure credit guarantee institution backed by the Nigeria SovereignInvestment Authority, GuarantCo (a Private Infrastructure Development Groupcompany), KfW Development Bank and Africa Finance Corporation to provide localcurrency guarantees and mobilize long term debt financing for infrastructure inNigeria. InfraCredit's guarantees act as a catalyst to attract domestic creditfrom pension funds, insurance firms and other long-term investors intocredit-worthy infrastructure projects, thereby deepening the Nigerian debtcapital markets. InfraCredit operates on a commercial basis with adevelopmental role and benefits from private sector governance.

InfraCreditmaintains the highest domestic financial strength ratings accorded to anyfinancial institution by Agusto & Co. and Global Credit Ratings Co., two ofthe major domestic credit rating agencies. For more information please visit www.infracredit.ng