Agusto & Co. affirms the ‘A’ rating assigned to FBN MB Funding SPV Plc’s Series 1 ₦5 billion 3-Year 10.5% Fixed Rate Senior Unsecured Bond, with a stable outlook.
The rating expires on 30 June 2021.
Agusto & Co. hereby affirms the ‘A’ rating assigned to FBNQ MB Funding SPV Plc’s ₦5 billion 3-Year 10.5% Fixed Rate Senior Unsecured Bond (‘the Series 1 Bond’ or ‘the Bond’). The Bond is guaranteed by FBNQuest Merchant Bank Limited (‘FBNQ MB’, ‘the Sponsor’ or ‘the Bank’) and mirrors the standalone rating of the Sponsor. FBNQ MB is rated ‘A’ by Agusto & Co, reflecting its adequate capitalisation, good liquidity profile, strong ability to refinance upheld by membership of the FBN Holdings Group and the experienced management team. Constraining the rating is the lingering obligor and sector concentration in the loan book and the Bank’s subpar profitability. Economic adversities elicited by the COVID-19 pandemic and the tight regulatory environment are also considered.
Based on our expectations that asset quality will remain acceptable, profitability to be sustained by ancillary income and capitalisation will remain adequate despite elevated macroeconomic risks, a stable outlook is attached to the Sponsor’s rating and the Series 1 Bond. The rating and outlook will be closely monitored for material changes elicited by the pandemic that could impact the performance of FBNQuest Merchant Bank Limited in the near term.
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