Agusto & Co. hereby affirms the “Aaa” rating assigned to LFZC Funding SPV Plc’s ₦25 Billion Bond
The rating expires on 31 March 2024.
Agusto & Co. hereby affirms the “Aaa” rating assigned to LFZC Funding SPV Plc’s (“LFZ Funding SPV”, “the Issuer”, or “the Company”) ₦25 Billion 20-Year 13.25% Senior Guaranteed Fixed Rate Infrastructure Bond Due 2042 (“Series 2 Bond”, “the Bond” or “the Issue”) under the ₦50 Billion Bond Issuance Programme. The rating reflects the low default risk associated with the Bond based on the subsisting corporate guarantee provided by Infrastructure Credit Guarantee Company Limited (“InfraCredit” or “the Guarantor”), which is rated “Aaa” by Agusto & Co. Therefore, the rating of the Series 2 Bond is equalised with the Guarantor’s rating under our credit substitution criteria for guaranteed instruments. This is irrespective of our assessment of the financial condition of Lagos Free Zone Company (“the Co-Obligor” or “the Sponsor”), as the guarantee acts as an overriding single factor for the rating equalisation.
The Series 2 Bond was issued on 10 May 2022 at a coupon rate of 13.25% payable on the sixteenth day of March and September every year for twenty years, while the principal amount will be amortised bi-annually following the expiration of a five-year moratorium. The net proceeds were used by the Sponsor to refinance a bridge loan, which was obtained from a commercial bank to support ongoing construction at the Lagos Free Zone
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