Agusto & Co. assigns an “A+” rating to Access Bank Plc’s ₦30 billion 7-year Fixed Rate Subordinated Unsecured Notes
The rating expires on 30 June 2020.
Agusto & Co. hereby assigns a rating of “A+” to Access Bank Plc’s (“Access Bank”, the Issuer” or “the Bank”) proposed ₦30 billion 7-year, fixed-rate, subordinated, unsecured notes (“the Issue” or “the Notes”), maturing in 2026, and callable after 5 years. The rating assigned to the Issue is contingent on the standalone rating of the Issuer, taking into consideration the subordinated nature of the Issue. The Notes further rank pari passu without preference among themselves as well as all claims of holders of subordinated indebtedness of the Bank, existing and future.
The Issuer’s rating is hinged on the Bank’s good brand franchise buoyed by strong market share following the 2019 merger with Diamond Bank lifting its industry position, a good profitability profile, good liquidity, as well as an experienced and stable management team. The rating is however constrained by elevated non-performing loans following the merger, high funding costs vis a vis peers, which the Bank looks to moderate with the inflow of Diamond Bank Plc’s pool of retail deposits. Furthermore, persistent elevation in operating expenses vis a vis industry peers has impacted a potentially better profitability profile.
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