On July 2, 2024, Global Credit Ratings (GCR) reaffirmed InfraCredit’s “AAA” credit rating for the seventh consecutive time, maintaining a stable outlook.
GCR’s decision to reaffirm InfraCredit’s AAA rating highlights the company‘s strategic role as an infrastructure credit guarantee provider in Nigeria. The agency emphasized InfraCredit’s “complete not compete” competitive business approach, strong capital and leverage position, sound risk profile, and robust funding and liquidity.
“InfraCredit’s risk position is also a positive rating factor, underpinned by stringent underwriting criteria and the absence of any called guarantee, resulting in no recourse to InfraCredit to date,” GCR reported. The rating agency also praised InfraCredit’s stable management team, noting their sound risk and portfolio management experience.
Strong Performance
InfraCredit has demonstrated significant progress in fulfilling its mandate, with sustained growth in its outstanding guaranteed portfolio. As of March 31, 2024, the portfolio reached N203 billion ($152.6 million), up from N191.8 billion ($213.3 million) in 2023 and N120 billion ($267.5 million) in 2022.
This growth spans prioritised and eligible sectors, showcasing InfraCredit’s effective mandate delivery. Looking ahead, GCR has high expectations for InfraCredit’s continued business scaling. The agency noted a guaranteed transaction pipeline estimated at N627.6 billion ($471.4 million), indicating strong future growth prospects.
Stable Funding Structure
GCR also highlighted InfraCredit’s stable funding structure, which comprises equity, preference shares, and long-term subordinated borrowings from international development finance institutions (DFIs). This stable funding base supports the company’s robust financial position and capacity for future growth.
Commitment to ESG and Clean Energy Transition
InfraCredit’s competitive position is further bolstered by its strong Environmental, Social, and Governance (ESG) implementation and monitoring. This includes conducting ESG assessments for guaranteed entities and providing additional market access to lower-quality corporates.
GCR positively recognized the progress made in InfraCredit’s clean energy transition within its power sector portfolio, highlighting the milestones achieved over the past three years. This recognition underscores InfraCredit’s commitment to the economic, social, and environmental impacts of the projects it supports.
CEO’s Remarks
Commenting on the rating reaffirmation, InfraCredit’s CEO, Chinua Azubike, said, “The consistent affirmations of InfraCredit’s ‘AAA’ rating with a stable outlook by GCR for seven consecutive years exemplify the resilience and sustainability of the unique business model, strategy execution, strong management team, solid balance sheet, high-quality guarantees, and robust risk management practices. The rating agency’s consistent recognition of InfraCredit’s increasing ESG impact denotes a commitment to ensuring that projects have strong economic, social, and environmental considerations.”
Azubike further emphasized the importance of InfraCredit’s partnerships and collaborations. “The recognition by the rating agency of the positive impact our risk-sharing portfolios have on our net leverage ratios affirms our growth strategy through partnership and collaboration with our development partners,” he said.