Agusto and Co Limited, the Nigerian rating agency, has affirmed national-scale ratings of A (Kenya) and A+ (Nigeria), with a stable outlook, to Shelter Afrique Development Bank, the Nairobi-based pan-African company whose mission is to support housing and urban development on the continent.
The agency also affirmed its A+ (Ngr) ratings on Shelter Afrique’s Series I bonds issued last April. The bonds are Shelter Afrique’s series I issuance under its Nigerian Naira (NGN) 200bn domestic programme to finance large, affordable housing projects in Nigeria.
“The rating is hinged on the company’s multilateral legal ownership and relationship with 44 African governments, as well as its critical developmental mandate to drive affordable housing demand and supply in Africa,” said Agusto and Co.
Agusto and Co Ltd said Shelter Afrique’s satisfactory liquidity profile, adequate capitalisation for short-term risks, low leverage and improved ability to attract funding contributed to the ratings.
However, Agusto said the company’s rating was restricted by its weak asset quality, a result of legacy non-performing loans. “We have also considered the inconsistent capital contributions from the member countries and frequent changes in senior management as rating negatives,” it added.
Shelter Afrique said that the expansion of its development portfolio, efficiency of its contributed capital, and good governance were key to its improved ranking.
Shelter Afrique Development Bank is a pan-African institution focused on financing and promoting housing and urban development across the African continent. The bank operates through a partnership involving 44 African governments – including the Uganda government – the African Development Bank, and the Africa Reinsurance Corporation.
