Agusto & Co. assigns Shelter Afrique an “A(ken)” and “A+(ngr)” ratings and attaches a stable outlook.
This rating expires 30 June 2022.
Agusto & Co. hereby assigns “A(ken)” and “A+(ngr)” ratings to Shelter Afrique (“SHAF” or “the Company”). The ratings reflect SHAF’s critical developmental mandate, strong representation of beneficiary countries among members, improved governance framework and multipronged strategy to drive affordable housing demand and supply in Africa through financing, public-private partnerships (PPPs), advocacy and research. The ratings are, however, constrained by the Company’s relatively concentrated and small developmental portfolio and impact, sluggish capital contributions from the member countries and limited funding. Notwithstanding, SHAF’s adequate capitalisation for near-term business risks, satisfactory liquidity profile and very low leverage (and improved capacity to attract funding) mitigate the impact on the ratings. The continued progress towards overcoming the Company’s weak asset quality, subpar profitability and limited activities following management challenges in 2016 has also been taken into consideration.
Shelter Afrique, also known as the Company for Housing and Habitat in Africa, is owned by 44 Class A shareholders comprising African governments and two Class B shareholders: African Development Bank and African Reinsurance Corporation African. Class A shareholders have seven representatives on SHAF’s board of directors while Class B shareholders have two. The Company’s two largest Class A shareholders are the Republic of Kenya with 14.82% and the Federal Republic of Nigeria with 14.72%. Kenya is rated “B+” and Nigeria is rated “B” by Agusto & Co. African Development Bank, which has a “Aaa” rating, is the third largest shareholder with 14.09%. SHAF has a mandate to support affordable housing and urban development in Africa. The Company’s core strategy for reducing the 17 million-unit housing deficit on the continent is to drive demand for housing by providing lines of credit to fund mortgage related activities while driving supply of housing by providing project finance loans to developers for housing construction.