Rating Release
Agusto & Co. hereby assigns an ‘A-’ rating to LECON Finance Company Limited with a stable outlook
The rating expires on 30 June 2025
Agusto & Co hereby assigns an ‘A-’ rating to LECON Finance Company Limited (“LECON” or “the Company”). The rating reflects LECON’s good asset quality, good profitability and strong capitalisation upheld by the recent capital raise and low leverage. The rating also takes into cognisance the strong support from the largest shareholder – Bank of Industry (BOI), which is rated “Aaa” on the national scale by Agusto & Co. Limited. BOI’s support is demonstrated by the funding and guarantees provided to LECON and the access granted to the DFI’s technical partners. However, the rating is constrained by the use of short-term borrowings to fund long-term assets which exposes the Company to repricing risk in a rising interest rate environment and the low liquidity ratio in the review year. We also note LECON’s exposure to possible political interference that could disrupt governance and the execution of strategic objectives given that it is ultimately owned by the Federal Government of Nigeria (FGN). Furthermore, the macroeconomic challenges plaguing Nigeria also constrain the rating.
