Agusto Affirms ‘Aaa’ rating assigned To InfraCredit

Credit rating agency, Agusto & Co, on Monday said it has assigned “Aaa” rating to Infrastructure Credit Guarantee Company Limited (InfraCredit).
According to the ratings definitions available on its website, Agusto says ‘Aaa,’ its best rating is assigned to a “financial institution of impeccable financial condition and overwhelming capacity to meet obligations as and when they fall due”
Companies, which typically scores above 89% on its scoring grid, Agusto continued, are such that adverse changes in the macro-economic, political and regulatory environment would not likely lead to a deterioration in financial condition. It would also not impair their ability to meet obligations as and when they mature, arising from their ability to obtain regulatory and/or shareholder support, if required.
Following from the above explanations, Agusto hinged its rating assigned to InfraCredit, which expires on June 30, 2019, primarily on the support of the Nigeria Sovereign Investment Authority (NSIA)- its shareholder, as well as contingent capital provider, GuarantCo Management Company Limited (GuarantCo).
Such support, Agusto said is demonstrated through contributed capital and active involvement in guiding the corporation in the formative years through technical and financial support.
The rating also noted InfraCredit’s good liquidity, risk management and asset quality, drawing attention however to the dearth of bankable infrastructure projects that elongates transaction origination timeframe and tempers the assigned rating.
A statement by Agusto, announcing the rating, noted that “given the huge infrastructural financing needs of Nigeria estimated at $100bn annually and the dearth of long-term capital required by infrastructure projects, the credit guarantees being provided by developmental institutions like InfraCredit will serve as a catalyst to attract investments from pension funds, insurance firms and other long-term investors. “
The statement noted “the need to create strong post-guarantee monitoring frameworks which will oversee the usage of the funds and the remittance of revenue being generated from these projects,” which it noted, remains critical for these institutions.
Agusto therefore spoke of the need to develop effective public-private partnerships that would help create bankable investment projects for investors and fund managers that would enhance construction of critical infrastructure capable of driving sustainable national growth.
The statement also noted Nigeria’s pool of pension assets now worth over ₦8.5tr, out of which a maximum of 5% are permissible for infrastructure investments.