Agusto & Co and Global Credit Ratings (GCR) have again reaffirmed the ‘AAA’ credit rating of the Infrastructure Credit Guarantee Company Limited, a specialized institution backed by the Nigerian Sovereign Investment Authority.
GCR, for example, noted that its “rating is underpinned by the uniqueness of Infrastructure Credit Guarantee Company Limited’s operations as a credit guarantee provider, and the company’s strong capitalization, liquidity, and asset quality position, albeit counterbalanced by its self-regulated status.”
Other factors working in InfraCredit’s favour, according to a statement on Monday, include its strong financial profile score of 5.25, one of the highest in the financial services industry underpinned by the company’s growing capital buffers, liquidity, and broader balance sheet strength, complemented by the sound governance and risk management culture, key fundamentals that underscore its credibility as a guarantor, as well as the sustainability of its business model.
Factors believed to be working in the favour of InfraCredit include the 64% growth in core capital within the period under review, which followed the equity investments of InfraCo Africa, as well as its retained earnings.
The strength of the rating is also partly supported by the commitment of its capital providers and the prospect of infraCredit sustainably growing its capital base through internally generated capital by way of earnings retention and new capital injection from existing and prospective equity and debt capital providers.
Explaining its own rating, Agusto took cognizance of the technical, governance, and capital support extended by the shareholders and GuarantCo Management Company Limited, the callable capital provider.
The ‘AAA’ rating, it added, reflects InfraCredit’s unparalleled credit quality, asserting that “the acceptable risk management framework, good return on investments during the year and an experienced management team.”
The affirmation of the rating, it said, reinforces the strength of InfraCredit’s transaction structuring, quality of guarantee portfolio, and overall risk management practice, especially as it impressively sustain the history of zero delinquency, proven quality of its instruments and obligors.
Agusto also emphasized the increasing diversity of the equity base, particularly the US$27m investment of InfraCo Africa during the review period, which it says is a reflection of the capacity of InfraCredit to consistently scale-up capital, as may be required in growing its guarantee portfolio.
Reacting to the ratings, Managing Director and Chief Executive of InfraCredit, Chinua Azubuike noted that the simultaneous affirmation of the rating, with stable outlook by Agusto and GCR, “is a validation of our balance sheet capacity and more importantly, the credibility of our guarantee instruments.
“We will continue to leverage our unique capabilities and innovative approach in deepening the debt capital markets for infrastructure finance in the country, particularly as we strengthen our collaboration with domestic and multilateral partners in unlocking blended finance and latent capital for commercially viable infrastructure projects, targeted at enhancing standards of living and supporting inclusive growth in Nigeria.”