Fitch Ratings, a global credit rating agency, has assigned Access Bank Plc’s tier two subordinated bond worth N30 billion a final national long-term rating of ‘A(nga)’.
The assignment of the final rating, which is in line with the expected rating assigned on June 6, 2019, followed the receipt of final documents conforming to information already received, Fitch said in a statement.
“The bonds are rated one notch below Access’s ‘A+(nga)’ National Long-term Rating,” Fitch said. “This reflects higher loss-severity relative to senior unsecured instruments, which is due to their subordinated status.”
“No additional notching has been ascribed for nonperformance risk, as Fitch regards this to be minimal relative to that captured in Access’s National Long-term Rating.”
Nigeria’s largest lender by total assets issued the seven-year local currency bonds on July 23, 2019, with a 15.5 per cent fixed-rate and a maturity date of July 23, 2026. The bonds, according to Fitch, rank pari passu with the claims of all other subordinated debt.
This implies there are no contractual going-concern features such as coupon deferral or omission and writedown or conversion ahead of non-viability.
However, it said the bonds’ ratings are sensitive to changes in Access’ National LongTerm Rating, which reflects the bank’s creditworthiness relative to other issuers in Nigeria.
Nigeria’s first credit rating agency, Agusto & Co assigned the debt instrument “A+”. As at the close of business Friday on the FMDQ Security Exchange, yield on the bond stood at 15.28 per cent, while risk premium was at one per cent.
Meanwhile, the Nigerian Stock Exchange (NSE), in a statement on Friday, announced the listing of the bond to its daily official list.
“Dealing Members are hereby notified that Access Bank Plc’s N30,000,000,000, 7-Year 15.5% Fixed Rate Subordinated Unsecured Bonds Due 2026, were listed on the Daily Official List of The Nigerian Stock Exchange on Tuesday, 17 September 2019,” the local bourse said.
