Global Credit Rating Company Limited (GCR), a leading rating agency, has in its latest report affirmed InfraCredit’s public national scale long-term rating of AAA (NG) with a stable outlook.
Agusto & Co. Limited, Nigeria’s first credit rating agency, also affirmed InfraCredit’s ‘AAA’ (NG) public national scale rating with a stable outlook in its latest report.
GCR noted in a statement that InfraCredit’s ‘AAA’ (NG) rating reflected the assessment of its business model, governance structure, capitalisation, risk mitigation mechanisms, financial performance, as well as the profile of the shareholders and capital providers.
According to the statement, InfraCredit has demonstrated strong financial flexibility through diversification of its capital base during FY2018. This was as a result of an increased capitalisation of N21.8 billion via a combination of equity capital from Africa Finance Corporation and a long-term subordinated unsecured loan from KfW Development Bank in 2018.
The assigned rating also recognises InfraCredit’s stringent risk management process and obligations under its guarantees that have helped to strengthen exposure risk protection. InfraCredit guarantees the timely scheduled payment of principal and interest by the Issuer under the guaranteed debt, which confers unrestricted monitoring and step in rights on the Institution.
“The rating reflects the strength of our business model, diversified capital base and strong risk management framework in line with global best practices,” Chinua Azubike, managing director/CEO, InfraCredit, said on the ratings action.
“We have continued to make significant strides in Nigeria’s financial markets by strengthening our product portfolio and partnerships to unlock the potential for local currency infrastructure in Nigeria,” Azubike said.
Agusto & Co said in a statement that InfraCredit’s ‘AAA’ (NG) rating reflected the expanding and implicit support of its sponsor base.
InfraCredit is sponsored by the Nigeria Sovereign Investment Authority (NSIA), Africa Finance Corporation (AFC) and GuarantCo Management Company Limited (GuarantCo) which provide funded and unfunded capital for the Corporation’s guarantee operations.
“The assigned rating also recognises InfraCredit’s good asset quality backed by an acceptable risk management framework as well as its strong capital base, liquidity profile and financing capacity. The support being received from its sponsors continues to ensure that asset quality remains good as evidenced by the nil impairment since InfraCredit’s inception,” the rating agency said.
Azubike said the rating reflects InfraCredit’s strong balance sheet, solid capital consistent with ‘AAA’ credit ratings and commitment to the highest standards of corporate governance and best practices in all aspects of our business.
“We are building a vibrant institution that serves as a catalyst in the attraction of long-term capital into infrastructure finance in Nigeria, by fostering our development impact in Nigeria’s debt capital markets and in helping to bridge the infrastructural gap in the country,” he said.
InfraCredit reported a profit of N171 million in FY 2018, from a loss position of N403 million in FY2017, demonstrating its financial viability and resilience by turning profitable within its first full year of commercial operations.
This performance was majorly achieved on the back of the full year income generated from its guarantee portfolio and a stronger investment income from its paid-in capital.
InfraCredit is a ‘AAA’ rated specialised infrastructure credit guarantee institution backed by the Nigeria Sovereign Investment Authority, GuarantCo (a Private Infrastructure Development Group company), KfW Development Bank and Africa Finance Corporation to provide local currency guarantees and mobilize long term debt financing for infrastructure in Nigeria. InfraCredit’s
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