Fitch Ratings (Fitch), a company that evaluates financial stability, has given a strong rating of “AAA(nga)” to Infrastructure Credit Guarantee Company Limited (InfraCredit) due to its strong financial position and infrastructure support.
Fitch also gave InfraCredit a “B+” rating for its International Long Term Financial Strength. This rating is two levels higher than Nigeria’s own credit rating of ‘B’. This means that InfraCredit’s rating surpasses the limit for foreign currency credit in Nigeria.
According to a statement, Fitch believes that InfraCredit’s outlook is stable. This is due to its strong financial foundation, good performance, ability to manage debts well, and focus on supporting infrastructure projects in Nigeria.
InfraCredit also invests in Nigerian sovereign bonds, which are government-backed bonds. Fitch thinks that InfraCredit’s business profile is positive because it helps with important infrastructure projects in Nigeria. The company also reduces risk by making sure its projects are backed by valuable assets.
Fitch’s ratings are also influenced by InfraCredit’s consistent profits. In recent years, its return on equity has been around 15.6 percent, which is a sign of stability and growth. Fitch believes that as InfraCredit continues to expand, its financial strength will improve.
Fitch also talked about InfraCredit’s ability to manage debts well. This means that the company has been able to pay back its debts on time and without any problems. Fitch thinks this is important because InfraCredit helps fund important projects that improve local infrastructure.
Chinua Azubike, InfraCredit’s CEO, said that the Fitch ratings show that the company has a strong business model and is financially stable. He also mentioned that InfraCredit has a better credit rating than Nigeria itself.
Azubike explained that investing in well-structured infrastructure projects is actually less risky than people might think. He said that InfraCredit’s goal is to make these projects more attractive to investors and help Nigeria’s economic development.
He said, “Our ratings by Fitch reinforces the strength of InfraCredit’s business model, resilient capital structure, and quality of our guarantee portfolio, such that we have now earned a better credit rating than the country we operate in. Well-structured infrastructure projects, especially when financed in local currency, and particularly in Africa, has one of the lowest default rates in the world, and this is evident in our zero-loss history.
“Our track record demonstrates that the perceived risks of investing in African infrastructure are higher than the actual risks, and our mission is to use our credit enhancement tools to bring down the risk premium, build investor confidence, and unlock more domestic resources to finance economic development in Nigeria”.