Laikipia County rated ahead of Sh1.4b bond

Laikipia Governor Ndiritu Muriithi

Laikipia County has received its creditworthiness report ahead of a planned Sh1.4 billion infrastructure bond issue mid this year.

South African rating agency GCR Ratings gave the county a BB + meaning it was well placed to honour its debts.

“The ratings on Laikipia balance low levels of leverage, increasing own sources of revenue generation and ongoing government support counterbalanced by its relatively small and undiversified status, high wage bill and relatively low development expenditure absorption and somewhat constrained liquidity,” said the rating firm.

“We have also negatively reflected the succession of qualified audit opinions,” added GCR.
Credit ratings promote fiscal responsibilities and also help investors with an independent opinion on an entity's ability to honour debts.

“Investors can now have confidence in our payment abilities and this boosts our plans to find alternative funding for development projects,” said Laikipia Governor Ndiritu Muriithi.

Laikipia is at an “advanced stage” with the bond issuance in which monies raised will go towards projects such as smart towns and irrigation, including reticulation.

“The next step is to compile our applications and work with Treasury to have the bond issued by April,” added Governor Muriithi.

The Governor was speaking on Tuesday during the launch of the credit rating, function was attended by senior National Treasury officials, public finance agencies and regulators from the capital markets.

Laikipia now joins three other counties including Bungoma, Makueni and Kisumu which received their credit ratings last year aimed at enabling them to determine their ability to unlock private sector and capital markets funding.