Agusto & Co. affirms the ‘A-’ rating assigned to Union Bank of Nigeria Series 1 and 2 Combined Issuance of ₦13.5 billion Bond

Rating Release

Agusto & Co. affirms the ‘A-’ rating assigned and attaches a negative outlook to Union Bank of Nigeria Plc’s Series 1 and 2 Combined Issuance of 13.5 billion Fixed Rate Direct Senior Unsecured Issue under the 2018 Registered 100 billion Debt Issuance Programme.

Agusto & Co. hereby affirms the ‘A-’ rating assigned to the combined Series 1 (3-year) 15.5% and Series 2 (7-year) 15.75% senior unsecured bond issuance (“the Issue” or “the Bond”) by Union Bank of Nigeria Plc (“UBN”, “the Issuer” or “the Bank”). The rating assigned mirrors the standalone “A-” credit rating assigned to UBN by Agusto & Co. Limited and the seniority status of the Issue over other unsecured obligations. The rating assigned to the Issuer reflects an adequate capitalisation, improved asset quality, enhanced profitability and a good liquidity profile. Constraining the rating are the Bank’s low profitability, the impact of unfavourable regulations and prevailing macroeconomic headwinds elicited by the COVID-19 pandemic.


Due to the increasing level of economic uncertainties triggered by COVID19 and the adverse impact on the economy, the near-term outlook for the banking industry is weak. Given the vulnerabilities in the Issuer’s earnings and particularly its asset quality (relatively high stage 2 and 3 loans), a negative outlook is attached to the rating UBN and accordingly to the Issue’s rating. Agusto & Co will closely monitor the outlook and rating as the impact of the pandemic on the operating terrain evolves.

This Rating Release is transmitted to you for the sole purpose of dissemination through your newspaper / magazine / agency. The rating release may be used by you in full or in part without changing the meaning or context thereof but with due credit to Agusto & Co.