Rating Release

Agusto & Co. affirms the ‘A-’ rating assigned to FSDH Funding SPV Plc’s Series I 5-year subordinated Bond (Tranche A) and the ‘A’ rating assigned to the Series 1 5-year senior unsecured Bond (Tranche B), with a stable outlook

The rating expires on 4 December 2023.

Agusto & Co. affirms the ‘A-’ rating assigned to the Series I 5-year subordinated bond (‘Tranche A’) and the ‘A’ rating assigned to the Series I 5-year senior unsecured bond (‘Tranche B’) of FSDH Funding SPV Plc (“the Issuer” or “the SPV”). The combined issue of ₦12 billion (“the Issue” or “the Bond”) is the first series of a ₦30 billion debt issuance programme (“the Programme”) registered with the Securities and Exchange Commission (SEC) in 2021. The Issue is backed by FSDH Merchant Bank Limited (“FSDH MB” or “the Sponsor” or “the Bank”) which guarantees all obligations of the Issuer under the Programme.

The rating assigned to Tranche A is a notch lower than the Sponsor’s rating of ‘A’ by Agusto & Co., given its subordinated status, while the rating assigned to Tranche B reflects its par ranking with other senior unsecured obligations of the Bank. The Sponsor’s rating is hinged on good capitalisation, satisfactory liquidity profile, improved profitability and an experienced management team. However, the rating is constrained by obligor and sectorial concentration in the loan book, unfavourable regulations which continues to challenge the merchant banking segment significantly and the weak macroeconomic terrain.