African Export-Import Bank (Afreximbank) has received an inaugural international-scale long term issuer rating of A- with a stable outlook from the Japan Credit Rating Agency (JCR). The rating reflects the strong support that Afreximbank receives from its shareholders, its preferred creditor status, its solid earnings capacity, and the crucial role that the Bank plays in supporting key African Union (AU) initiatives. JCR noted in its assessment the growing pre-eminence of Afreximbank in African trade, citing the Bank’s involvement in critical initiatives that underpin the African Continental Free Trade Area (AfCFTA) as a key indicator. This new rating also captures the Bank’s key strength in structured trade finance, demonstrating its ability to de-risk its lending portfolio. JCR observes that “under this circumstance, the Bank mitigates credit risk through measures including the use of the structured trade finance scheme to transfer payment risk to counter parties with higher creditworthiness, insurance and collateralisation.”
Afreximbank’s achievement of the A- rating from a second rating agency is a major milestone, coming at the end of its current strategic plan. It supports the fulfilment of one of the overarching pillars of the strategic plan, namely financial soundness, which helps the Bank to leverage competitive financial resources into the continent. Strong credit rating gives assurance to investors who support Afreximbank’s fundraising activities as it demonstrates strong creditworthiness, thereby attracting funding at competitive terms. The Bank plans to execute a debt capital market transaction in Japan and this strong rating by JCR is essential as it gives lenders and investors confidence in the Bank’s credit profile.
Prof. Benedict Oramah, President of Afreximbank, commented: “The A- rating assigned to Afreximbank is an affirmation of the Bank’s strengthening credit profile, underpinned by a strong risk management culture. We are also pleased that the work of the Bank supporting such initiatives as the AfCFTA is being recognised and its importance rewarded. This high rating which comes as the Bank is about to embark on a new 5-year strategic plan gives impetus to our fundraising activities. This will positively impact Afreximbank’s ability to deliver on its mandate.”
