Rating Release

Agusto & Co. hereby affirms the ‘Bbb+’ rating assigned to LAPO Microfinance Bank SPV Plc’s ₦3.15 billion Series I & ₦6.2 billion Series II Bonds

The rating expires on 30 June 2022

Agusto & Co. hereby affirms the ‘Bbb+’ ratings assigned to LAPO MFB SPV Plc’s (‘LAPO SPV’ or ‘the Issuer’) ₦3.15 billion Series I 5-Year 17.75% Fixed Rate Senior Unsecured Bond maturing in 2022 (‘Series I’) and ₦6.2 billion Series II 5-Year 13% Fixed Rate Senior Unsecured Bond maturing in 2025 (‘Series II’) respectively. The rating mirror the standalone rating of LAPO Microfinance Bank Limited (‘LAPO MFB’ or ‘the Sponsor’), which expires in June 2022. The Sponsor’s rating reflects LAPO MFB’s adequate capitalisation, low leverage, good liquidity and funding profile, dominant market position and experienced management team. The rating is, however, constrained by the Sponsor’s high non-performing loan ratio, which was accentuated by the adverse impact of the COVID-19 pandemic on LAPO MFB’s asset quality, deficiencies in the credit appraisal process and ownership concentration. The adverse impact of the COVID-19 pandemic on the general level of economic activities in Nigeria has also been considered.

LAPO MFB is one of the nine national microfinance banks in Nigeria. The Bank was incorporated as a limited liability company in 2007 and obtained the Central Bank of Nigeria’s (CBN) approval to operate as a state microfinance bank in 2010. In 2012, LAPO MFB acquired a national microfinance licence, authorising operations in Nigeria’s 36 states and the Federal Capital Territory (FCT) Abuja.