Rating Release

Agusto & Co. assigns a “Aaa” rating to Infrastructure Credit Guarantee Company Limited

The rating expires on 30 June 2020.

The rating assigned to Infrastructure Credit Guarantee Company Limited (“InfraCredit” or “the Corporation”) reflects 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 business. During the review year, AFC joined as a second cornerstone investor (including NSIA), subscribing to the ordinary and preference shares of InfraCredit. GuarantCo also provides a callable 15-year unconditional and irrevocable $50 million contingent capital.

In addition, these sponsors offer technical assistance to the Corporation based on their vast expertise in supporting infrastructure projects in African countries. AFC is rated Aaa (national) and Aa (foreign currency) by Agusto & Co while GuarantCo has an Aa- rating by Fitch and A1 rating by Moody’s. 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. In 2018, KfW Development Bank, a German state-owned development bank extended a €31 million ten-year loan to the Corporation at a simple interest rate of 6% per annum, further enhancing its funding base and reflecting additional support (in terms of capital and technical know-how). However, the fragile state of the Nigerian macroeconomic environment and its attendant impact on the availability of bankable and eligible projects remain a threat to the assigned rating.