Agusto & Co. affirms the ‘A-’ rating assigned to the Series I ₦7.05 billion 5-year subordinated bond and the ‘A’ rating assigned to the Series I ₦4.95 billion 5-year senior unsecured bond of FSDH Funding SPV Plc, with a stable outlook.
The rating expires on 4 December 2022.
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”) 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” 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 profile, while the rating assigned to Tranche B reflects its seniority in ranking to other unsecured obligations of the Bank. The Sponsor’s rating reflects its good capitalisation, strong liquidity profile and experienced management team. However, constraining these positives are the obligor and sectorial concentration risks in the loan book and subpar profitability. The ratings are also constrained by the adverse implications of the regulatory environment and the fragile economic recovery.