Rating Release

 Agusto & Co. hereby assigns an “A-“ rating to Axxela Funding 1 Plc’s ₦11.5 billion 7-Year 14.3% Fixed Rate Bond Due 2027 and attach a stable outlook.

This rating expires 31 May 2022.

Agusto & Co. hereby assigns an “A-” rating to the Axxela Funding 1 Plc’s (“the Issuer” or “SPV”) ₦11.5 billion 7-Year 14.3% Fixed Rate Bond Due 2027 (“Series 1”, “Bond” or “Issue”) under the ₦50 Billion Bond Issuance Programme. The assigned Issue rating mirrors the standalone rating of the Sponsor – Axxela Limited (rated “A-“ by Agusto & Co, which expires 30 June 2022), as the Bond is senior, secured and ranks pari passu with other senior obligations of the Co-Obligors – Axxela Limited and Gaslink Nigeria Limited. In addition, the repayment of the Series 1 Bond is premised on the irrevocable and unconditional undertaking of the Co-Obligors to jointly and severally repay the aggregate principal amount outstanding and coupon from their consolidated operating cash flow per the executed Master Notes Subscription Agreement.

In May 2020, Axxela Funding 1 Plc (a special purpose vehicle incorporated by Axxela Limited) issued a ₦11.5 Billion Series 1 Seven-Year 14.3% Fixed Rate Bond Due 2027 to purchase Notes issued by Axxela Limited and Gaslink Nigeria Limited, while the Co-Obligors utilised the proceeds to refinance existing debts and fund Sagamu and Lekki Free Zone gas pipeline construction project under Transit Gas Nigeria Limited (a related party). The coupon rate on the Series 1 Bond of 14.3% is being paid semi-annually over the seven-year tenor of the Bond, while the principal will be repaid half- yearly following the expiration of a two-year moratorium (from November 2022) over the tenor of the Issue.

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.