Agusto & Co. Nigerian and African foremost credit rating agency has assigned a rating of “A+” to Access Bank Plc’s proposed ₦30 billion 7-year, fixed-rate, subordinated, unsecured notes, maturing in 2026, and callable after 5 years.
The rating assigned to the Issue is contingent on the stand alone rating of the Issuer (Access Bank), taking into consideration the subordinated nature of the Issue. The Notes further rank pari passu without preference among themselves as well as all claims of holders of subordinated indebtedness of the Bank, existing and future.
The Issuer’s rating is hinged on the Bank’s good brand franchise buoyed by strong market share following the 2019 merger with Diamond Bank lifting its industry position, a good profitability profile, good liquidity, as well as an experienced and stable management team.
The Agusto & Co rating is however constrained by elevated non-performing loans following the merger, high funding costs vis a vis peers, which the Bank looks to moderate with the inflow of Diamond Bank Plc’s pool of retail deposits.
Furthermore, persistent elevation in operating expenses vis a vis industry peers has impacted a potentially better profitability profile.