The Africa Finance Corporation, a multilateral development financial institution headquartered in Lagos, on Monday secured its first international credit rating from Moody’s Investors Service.
Moody’s has assigned the corporation an A3 (long-term) /P2 (short-term) foreign currency debt rating, making the AFC the second highest investment grade rated multilateral financial institution in Africa.
According to a statement by AFC, Moody’s rationale for this investment grade rating is based on a sound capital adequacy position, high asset quality and strong prudential framework that support a high degree of liquidity, backed by an excellent profit margin and profit retention.
Additionally, it stated that the corporation’s strong liquidity framework and position, excess of the requirements of Basel III Capital Accord on liquidity risk management, would mitigate against external economic shocks, and help support planned growth.
The outlook on the rating is stable.
The statement quoted the President/Chief Executive Officer, AFC, Mr. Andrew Alli, as saying, “Attaining an investment grade International credit rating, only six years after inception, is a tremendous achievement. It is a major milestone in the Corporation’s history. This rating, together with AFC’s strong capital position and the quality of its portfolio, will enable AFC to grow its balance sheet, broaden its asset base and expand its geographical footprint.
“It is a further endorsement of the corporation’s rigorous investment process, innovative approach to infrastructure investment on the continent, world-class corporate governance and solid shareholder support. The corporation is poised to assist in further driving economic growth and industrial development in Africa. We are extremely pleased with the rating.”
AFC was established in 2007 as a private sector-led Pan African multilateral development finance institution, with an initial capital base of $1.1bn, to be a catalyst for private sector infrastructure investment across Africa.
The organisation was established to help fill a critical void in providing project structuring expertise and risk capital to address Africa’s infrastructure development needs.
AFC not only provides access to finance, deal structuring and sector technical expertise, but also advisory services, project development capacity, and funding. Its activities are meant to bridge the infrastructure investment and access deficits in the core infrastructure sectors of power, natural resources, heavy industry, transport and telecommunications, all critical pillars for economic growth across Africa, according to the statement