Fitch Upgrades InfraCredit’s Outlook to Positive
Fitch Ratings has revised the Outlook on Infrastructure Credit Guarantee Company Limited’s (InfraCredit) Insurer Financial Strength (IFS) rating to positive from stable and affirmed the rating at ‘B+’.
Also, Fitch affirmed InfraCredit’s National IFS rating at ‘AAA (nga)’ with a stable outlook. According to the rating note, the outlook revision follows the revision of the outlook on Nigeria’s sovereign rating to positive from stable on 3 May 2024.
Fitch believes the general operating environment for insurers in Nigeria is improving, due to significant reforms to restore macroeconomic stability and enhance policy coherence and credibility.
The rating note stated that Fitch continues to view InfraCredit’s company profile as ‘Favourable’ in the Nigerian context, based on its important role in supporting the realisation of essential infrastructure development projects as financial guarantor.
Analysts said InfraCredit’s guarantee portfolio is diverse across regions and industry sectors within Nigeria, and it has no direct competitors due to its unique business focus.
The assessment note stated that InfraCredit’s rating is constrained by the high concentration of Nigerian sovereign bonds in its investment portfolio, resulting in a very high estimated risky asset ratio of 388% at end-2023.
An upgrade of Nigeria’s sovereign rating would reduce InfraCredit’s risky asset ratio, thereby improving its investment and liquidity credit factor score, Fitch Ratings said. #Fitch Upgrades InfraCredit’s Outlook to Positive
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