Global banking rating group, Fitch Ratings has assigned Nigeria-based Access Bank Plc’s (Access) issue of USD300m 10.5% senior unsecured notes due 2021 a ‘B’ rating. The Recovery Rating is ‘RR4’, which denotes average recovery prospects given default. The notes were issued under the bank’s USD1bn global medium term note (GMTN) programme. Part of the new notes issued were pursuant to Access’ exchange offer on its existing USD350m 7.25% of senior unsecured notes due 2017 issued by a special purpose vehicle, Access Finance BV.
At the same time, Fitch has assigned final long and short-term ratings of ‘B’ to the USD1bn GMTN programme following a review of the final documentation.
The senior unsecured notes are rated in line with Access’ Long-term Issuer Default Rating (IDR) of ‘B’. In the agency’s view, the likelihood of default on these notes reflects the likelihood of default of the bank. Access’ IDR is driven by both potential support from the Nigerian authorities, if required, and the bank’s standalone creditworthiness as defined by a Viability Rating (VR) of ‘b’. RATING SENSITIVITIES The rating on the senior unsecured notes is sensitive to a change in Access’ IDR, including a lower propensity and ability of the Nigerian sovereign to provide support, particularly in foreign currency.
The IDR is sensitive to deterioration in the bank’s regulatory capital ratios, asset quality or liquidity. Like its peers, the bank’s financial metrics are under pressure from the current challenging operating conditions in Nigeria.
