A credit rating agency, Agusto & Company Ltd, has assigned ‘A(Ken)’ and ‘A+(ngr)’ ratings to Shelter Afrique Development Bank (ShafDB) (formerly Shelter Afrique).
The company's two largest Class A shareholders are Kenya with 14.82 per cent and the Federal Republic of Nigeria with 14.72 per cent.
The Nigerian agency has also affirmed ‘A+(ngr)’ to Shelter Afrique’s Series I tranche a five-year N27.18 billion (Sh5.25 billion) 13 per cent and Tranche B seven-year N18.82 billion (Sh3.47 billion) 13.25 per cent Bonds, which was issued in April 2022.
The bond forms the Series I issuance under Shelter Afrique’s N200 billion Domestic Bond Issuance Programme whose proceeds will be used to fund mass housing development projects and provide lines of credit in Nigeria.
“The ratings reflect Shelter Afrique’s critical developmental mandate, shareholder support, strong representation of beneficiary countries among members and multipronged strategy to drive affordable housing demand and supply in Africa,” said Agusto & Company.
To ensure continued growth and improvement, the agency noted that an expansion of the development portfolio, efficacy in capital contributions and good governance are key to the improvement of the organisation’s standings.
“The company’s adequate capitalisation for near-term business risks, satisfactory liquidity profile and very low leverage (and improved capacity to attract funding)” have contributed to the rating,” noted the rating firm.
Early this year, Shelter Afrique unveiled a five-year strategic plan, dubbed the 'New Dawn’ to restore the institution’s performance, competitiveness, and value creation for the long term.
The new strategy necessitated the re-alignment of the organisation and the introduction of a new organisational structure and operating model designed to support the institution’s innovation, growth, and productivity ambitions.
Shelter Afrique shareholders also recently approved the revised Statutes to elevate the housing and urban development financier into a development bank.
“These strongly positive ratings are in line with our 2023-2027 strategic objectives which we set to position the institution for growth through improved governance, and operational and financial performance.
"Our elevation into a development bank now sets the stage for a renewed, innovative, and impactful Shelter Afrique,” the firm said in a statement.