Rating Release

Agusto & Co. hereby affirms the “Aaa” rating assigned to TSL SPV Plc’s ₦12 Billion Bond

The rating expires on 30 October 2023.

Agusto & Co. hereby affirms the “Aaa” rating assigned to TSL SPV Plc’s (“TSL SPV”, “the Issuer”, or “the Company”) ₦12 Billion 10-Year 10% Series 1 Senior Guaranteed Fixed Rate Infrastructure Bond Due 2030 (“Series 1 Bond”, “the Bond” or “the Issue”) under the ₦50 Billion Bond Issuance Programme. The rating mirrors the “Aaa” rating of Infrastructure Credit Guarantee Company Limited1 (“InfraCredit” or “the Guarantor”) and underscores the low default risk associated with the Series 1 Bond. Agusto & Co did not appraise the financial condition of Transport Services Limited (“TSL”, “the Co-Obligor” or “the Sponsor”) but has hinged the rating affirmation on the credit substitution qualities of the subsisting guarantee arrangement that promises the full and timely payment of the Series 1 Bond obligations.

The Series 1 Bond was issued on 6 October 2020 at a fixed coupon rate of 10% payable semi-annually over ten years. The Bond principal will be redeemed bi-annually(beginning from 6 April 2023) until its final maturity on 6 October 2030 following the expiration of a two-year moratorium. The net proceeds of the Series 1 Bond were utilised by the Co-Obligor to refinance existing bank loans, support the acquisition of new vehicles to bolster its fleet size and fund the minimum reserve account, which is the equivalent of a one-time coupon payment. The Bond constitutes a direct, unconditional, senior and unsecured obligation of the Issuer and Co-Obligor (together referred to as Obligors). The payment obligations of the Obligors under the Bond and of the Guarantor under the Deed of Guarantee shall at all times rank at least equally with all their other unsubordinated indebtedness and monetary obligations (present and future).The Sponsor has met four coupon payments (amounting to ₦2.4 billion) to the Series 1 Bondholders. Should the Sponsor fail to fund the Payment Account, InfraCredit becomes liable and will continue to honour coupon and principal obligations on the due dates as specified in the amortisation schedule.

The opinions expressed in this rating release do not represent investment or other advice and should therefore not be construed as such. Visit www.agusto.com for further information.