Agusto & Co. affirms the “Aaa” (NGA) and “Aa-” (foreign currency) ratings and stable outlook assigned to Africa Finance Corporation
The rating expires on 30 June 2021.
The rating assigned to Africa Finance Corporation (‘’AFC” or the “Corporation”) reflects its role as a multilateral development financial institution in Africa with a preferred creditor status in twenty-eight African countries, which supports its operations in bridging infrastructure gaps in the continent.
The rating recognises AFC’s impressive profits in the financial year 2019, with a double-digit return on equity of 11.4%, the highest since inception. During the year under review, the Corporation raised a total of $1.35 billion in bond issuances, $50 million in equity and added six countries to its membership portfolio, lending credence to AFC’s position as Africa’s leading infrastructure development institution, with a demonstrated track record of delivering development impact and rewarding shareholders. Subsequent to year end, an additional $60 million was received in equity investment and two more countries joined the Corporation as members, taking the total number of member countries to 28 as at 30 September 2020.
AFC’s rating is also underpinned by its good asset quality, strong liquidity profile, good capitalisation ratios and the combined experience of its Board of Directors and management team. Nonetheless, the assigned rating is constrained by vulnerabilities to political and macroeconomic risks in African countries which have heightened on the back of the novel coronavirus (COVID-19) pandemic.
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