Agusto & Co. affirms “Bbb” rating assigned to Transcorp Hotels Plc’s (“Transcorp Hotels”, “Issuer”, “THP”, or “the Company”) ₦10 billion 7-year 16% fixed rate unsecured bond due 2022 (“Series 1”) and ₦9.758 billion 5-year 15.5% fixed rate unsecured bond due 2020 (“Series 2”) with a stable outlook.
This rating expires 30 September 2021.
The rating assigned to the Series 1 & 2 Bonds mirror the standalone rating of Transcorp Hotels Plc, which is also rated “Bbb” by Agusto & Co. to reflect on our opinion on the Company’s qualified and experienced management team, strong brand position, good cash-generating capacity and moderate leverage. However, the Company’s financial condition is constrained by weak profitability and overall working capital deficiency, which requires improvement. This is in addition to the country’s fragile macroeconomic environment as well as the adverse impact of the COVID-19 pandemic on the hospitality industry.
Transcorp Hotels Plc issued two bonds (Series 1 & 2) totaling ₦19.758 billion in Q4’2015 to finance the upgrade and refurbishment of Transcorp Hilton Abuja (“THA”) and the construction of a 5,000 seating-capacity Multipurpose Banquet Centre (MBC). The Series 1 Bond is a 7-year 16% fixed rate unsecured bond with a one-year moratorium on principal, while the Series 2 Bond is a 5-year 15.5% fixed rate unsecured bond with a 12-month moratorium on principal. The fixed coupon rates on both bonds are payable on a semi-annual basis over the tenor of the bonds
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