Rating Release

Agusto & Co. hereby assigns a ‘A-’ rating to United Capital Plc’s Series II ₦11.7 Billion Bond

This rating expires 29 August 2023.

Agusto & Co. hereby assigns an ‘A-’ rating to United Capital Plc’s (“United Capital” or “the Issuer”) 15% ₦11.7 Billion Five-Year Fixed-Rate Senior Unsecured Bond (“the Issue” or “the Bond”). The assigned rating mirrors the standalone rating of the Issuer as the Issue represents senior unsecured obligations that rank pari passu with United Capital’s other senior unsecured debts. Agusto & Co. assigned an “A-” rating to the Issuer in August 2021, with an expiry date of 30 June 2022. The Bond’s proceeds were used to underwrite fixed income securities and replace United Capital’s short-term borrowings.

The Issue’s fixed coupon rate of 15% is payable semi-annually starting six months from the allotment date while the principal will be repaid at maturity. The Bond’s principal and coupon will be paid from the Issuer’s operating cash flows. The rating is supported by United Capital’s good profitability, good liquidity and funding profile, large market share and experienced management team. The rating is, however, constrained by the considerable concentration and exposure to parties related to erstwhile parent (UBA Plc) and weak capitalisation. The present global and domestic economic challenges and the likely implications for the Issuer’s business have also been taken into consideration.