Agusto & Co. hereby affirms the “S3sf” rating assigned to AFIL SPV Plc’s ₦100 Billion Commercial Paper 

Rating Category: Corporate Bonds

Agusto & Co. hereby affirms the “S3sf” rating assigned to AFIL SPV Plc’s ₦100 Billion Commercial Paper 

Rating Release

Agusto & Co. hereby affirms the “S3sf” rating assigned to AFIL SPV Plc’s ₦100 Billion Commercial Paper 

The rating expires on 31 December 2023.

Agusto & Co. hereby affirms the “S3sf” rating assigned to AFIL SPV Plc’s (“AFIL”, “the Issuer” or “SPV”) ₦100 Billion Asset-Backed Commercial Paper (ABCP) Issuance Programme. Under the ABCP Programme, the SPV has issued 10 tranches (Tranches A – H, J & K) totalling ₦27.9 billion under the Series 1 issuance as conventional or Shari’ah Notes either as a single tranche, re-opening of existing tranches or in multiple tranches of not more than 270 days. Our rating affirmation reflects i) the partial corporate guarantee provided by AFEX Commodities Exchange Limited (“AFEX”, the Sponsor”, the Guarantor”, “the Collateral Manager” or “the Company”) and AFEX Investment Limited (co-guarantor) to cover up to 50% of the principal outstanding and accrued interest in the unlikely event of a default by an Obligor (commodity buyers or processors) in meeting the Financing Agreement repayments obligations, and ii) the satisfactory recovery prospects of the 100% pledged commodities in a stressed position. Furthermore, Agusto & Co. notes positively that all the 10 commercial paper issuances under the Series 1 ABCP have been fully repaid as of 31 December 2022, evidencing a good track record. Nonetheless, we remain concerned about the absence of external liquidity support to fund the commodities exposure in a stressed scenario given the extreme liquidity requirements of ABCP Programmes.

AFIL SPV Plc intends to issue up to ₦30 billion in six tranches (Tranches A – F) as part of a Series 2 Issuance as conventional or Shari’ah Notes either as a single tranche or in multiple tranches of not more than 270 days under the ABCP Issuance Programme in line with the existing transaction structure. Agusto & Co. notes that the Series 1 & 2 CP issuances are within the ABCP Programme limit of ₦100 billion and as such the credit considerations remain valid. The proceeds of the conventional CP Notes to be issued under the Series 2 ABCP Programme shall be domiciled with the Custodian. Processors will purchase commodities and deliver same to the Collateral Manager at an accredited AFEX warehouse, wherein the Collateral Manager will issue electronic warehouse receipts (e-WR) for the stored commodities which shall be pledged to AFIL or Custodian. Furthermore, the Custodian will disburse the cash equivalent of the pledged commodities to the obligors. Under the Shari’ah-compliant Murabaha Notes structure, the Issuer will purchase the commodities on request from the processors (and deposit with the Collateral Manager at designated warehouses) and resell them to the Processors at an agreed price consisting of the purchase price and markup. In line with the existing ABCP Programme structure, the Co-guarantors will irrevocably and unconditionally guarantee up to 50% of each conventional CP Note and up to 50% of the payment obligation of the Processors under the Murabaha facility agreement in line with the terms of the executed Deed of Guarantee.

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.

This Rating Release is transmitted to you for the sole purpose of dissemination through your newspaper / magazine / agency. The rating release may be used by you in full or in part without changing the meaning or context thereof but with due credit to Agusto & Co.
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Finance & Leasing

COMPANY RATING EXPIRY OUTLOOK COUNTRY
C& I Leasing Plc’s Series I ₦10 billion 7-year 15.5% Fixed Rate Senior Secured Bond Bbb+ Jun 30 , 2023 Stable Nigeria
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Corporates

COMPANY RATING EXPIRY OUTLOOK COUNTRY
UAC of Nigeria Plc A- Jun 30 , 2023 Stable Nigeria
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GPC Energy & Logistics Limited Bbb Jun 30 , 2023 Stable Nigeria
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UAC Foods Limited A- Jun 30 , 2023 Stable Nigeria
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BB Landmark Realty Limited Bbb Jun 30 , 2023 Stable Nigeria
Julius Berger Nigeria Plc A- Jun 30 , 2023 Stable Nigeria
BUA Cement PLC A+ Jun 30 , 2023 Stable Nigeria
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Industrial and Medical Gases Nigeria Plc A+ Jun 30 , 2023 Stable Nigeria
African Nonferrous Industries Limited A- Jun 30 , 2023 Stable Nigeria
North South Power Company Limited A- Jun 30 , 2023 Stable Nigeria
African Foundries Limited Bbb+ Jun 30 , 2023 Stable Nigeria

Corporate Bonds

COMPANY RATING EXPIRY OUTLOOK COUNTRY
AFIL SPV Plc Asset Backed Commercial Paper S3sf Dec 31 , 2023 Stable Nigeria
Flour Mills Nigeria Plc's ₦20 billion Series 3 Bonds (Tranche A & B) A- Feb 29 , 2024 Stable Nigeria
ABC Transport Plc's ₦900 Billion Five-Year 16.5% Fixed Rate Senior Secured Bond Due 2027 Bbb- Jun 30 , 2023 Negative Nigeria
Flour Mills of Nigeria Plc up to ₦40 billion 3-Year Fixed Rate Senior Unsecured Bond Due 2026 A- Dec 31 , 2023 Stable Nigeria
LFZC Funding SPV Plc’s up to ₦25 Billion 20-Year Senior Guaranteed Fixed Rate Infrastructure Bond Due 2042 Aaa Mar 31 , 2024 Stable Nigeria
Eat & Go Finance SPV Plc’s ₦11.5 Billion 14.25% Seven-Year Fixed Rate Senior Unsecured Bond Due 2026 Bbb- Dec 31 , 2023 Stable Nigeria
Sundry Foods Funding SPV Plc’s ₦2.5 Billion 5-Year 13.5% Series 1 Fixed Rate Bond Due 2026 A- Dec 31 , 2023 Stable Nigeria
TSL SPV Plc’s ₦12 Billion 10-Year 10% Series 1 Senior Guaranteed Fixed Rate Infrastructure Bond Due 2030 Aaa Oct 31 , 2023 Stable Nigeria
BUA Cement Plc's ₦115 billion 7.5% Seven-Year Senior Unsecured Fixed Rate Bond Due 2027 A+ Dec 31 , 2023 Stable Nigeria
NCNR SPV Limited’s ₦10.5 Billion 14% Fixed Rate Series 1 Bond Due 2027 A- Sep 30 , 2023 Stable Nigeria
LFZC Funding SPV Plc’s ₦10.5 Billion 20-Year 13.25% Senior Guaranteed Fixed Rate Infrastructure Bond Due 2041 Aaa Jun 30 , 2023 Stable Nigeria
Axxela Funding 1 Plc's ₦11.5 billion 14.3% Fixed Rate Bond Due 2027 A- May 31 , 2023 Stable Nigeria
MTN Nigeria Communications Plc’s up to ₦100 billion Series 1 Bond Aa+ Jun 30 , 2023 Stable Nigeria
Geregu Sukuk Plc’s ₦20 billion Bond Bbb+ Jun 30 , 2023 Stable Nigeria
GEL Utility Funding SPV PLC’s ₦13 Billion Bond Aaa Aug 31 , 2023 Stable Nigeria
Viathan Funding Plc.’s ₦10 billion 10-year Series 1 Senior Guaranteed Fixed Rate Bond Due 2027 Aaa Dec 31 , 2027 Stable Nigeria
NSP-SPV PowerCorp Plc’s ₦10 Billion 15-year Series 1 Aaa Dec 31 , 2033 Stable Nigeria