Announcements Corporate Rating Alerts

GCR affirms North South Power Company Limited’s Series 1 Guaranteed Bond Rating of AAA(NG); Outlook Stable

Lagos, 15 January, 2021 — Global Credit Ratings has affirmed the national scale rating of AAA(NG) assigned to NSP-SPV POWERCORP PLC’s Series 1 Guaranteed Bond; with the outlook accorded as Stable. The rating is valid until November 2021.

RATING RATIONALE

Global Credit Ratings (“GCR”) has accorded the above credit rating(s) to NSP-SPV POWERCORP PLC (“the Issuer”) based on the following key criteria:

NSP-SPV raised an aggregate sum of N8.5bn from the capital market through Series 1 Bond Issue, under a N50bn Bond Issuance Programme in February 2019. The Series 1 Guaranteed Senior Fixed Rate Bonds (“Series 1 Bonds” or “the Bonds”) which is fully guaranteed by Infrastructure Credit Guarantee Company Limited (“InfraCredit”), have a 15-year tenor, with the legal maturity date being 27 February 2034. The third scheduled principal and coupon payment was made on 27 August 2020 in line with the Series 1 Bonds Trust Deed. The Series 1 Bonds constitute direct, senior, unconditional and unsubordinated obligations of the Issuer, as such, all payment obligations under the Issue (except otherwise provided for by applicable laws) will rank equal with all other present or future unsubordinated payment obligations of both the Issuer and the Guarantor.

By virtue of the guarantee agreement entered into by InfraCredit and the Trustees (acting on behalf of the bondholders) in relation to the Series 1 Bonds, InfraCredit, in its capacity as Guarantor, irrevocably and unconditionally guarantees the punctual and full (100%) settlement of: i) scheduled interest payment ii) scheduled principal payment, iii) and any interest accrued but unpaid. GCR affirmed InfraCredit’s long term national scale rating of AAA(NG) in July 2020.

The Sponsor is one of the key players in the highly fragmented electricity generation market in Nigeria, with demonstrated ability to profitably manage and operate the 600-megawatt Shiroro Hydro Electric Power Plant, under a 30-year concession agreement with the Federal Government of Nigeria (“FGN”). GCR affirmed NSP’s long term national scale rating of A-(NG) in December 2020, with the outlook accorded as stable.

According to the Trustees’ report dated 27 November 2020, the Issuer has timeously met its obligation under the Series 1 Bonds to date.

The AAA(NG)(sf) national scale long term credit rating accorded to the Series 1 Bonds is fully supported by the Guarantor’s credit rating. As such, a downgrade in the rating of the Guarantor will affect the rating of the Series 1 Bonds, but not necessarily in the same quantum

NATIONAL SCALE RATINGS HISTORY

Rating Class Rating Outlook Date
Initial rating
Long term AAA(NG) Stable April 2019
Last rating
Long term AAA(NG) Stable December 2019

ANALYTICAL CONTACTS

Primary Analyst

Funmilayo Abdulrahman

Senior Credit Analyst

funmilayo@gcrratings.com

Committee Chairperson

Dave King

APPLICABLE METHODOLOGIES AND RELATED RESEARCH

Global Master Criteria for Rating Corporate Entities, updated February 2018

NSP rating reports (2017-19)

Glossary of Terms/Ratios (February 2018)

RATING LIMITATIONS AND DISCLAIMERS

ALL GCR’S CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://GLOBALRATINGS.COM.NG/UNDERSTANDING-RATINGS. IN ADDITION, GCR’S RATING SCALES AND DEFINITIONS ARE ALSO AVAILABLE FOR DOWNLOAD AT THE FOLLOWING LINK: HTTP://GLOBALRATINGS.COM.NG/RATINGS-INFO/RATING-SCALES-DEFINITIONS. GCR’S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, PUBLICATION TERMS AND CONDITIONS AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE AT HTTP://GLOBALRATINGS.COM.NG.

SALIENT FEATURES OF ACCORDED RATINGS

GCR affirms that a.) no part of the rating process was influenced by any other business activities of the credit rating agency; b.) the ratings were based solely on the merits of the rated entity, security or financial instrument being rated; c.) such ratings were an independent evaluation of the risks and merits of the rated entity; d) the ratings expire in August 2019.

NSP participated in the rating process via written correspondence. Furthermore, the quality of information received was considered adequate and has been independently verified where possible.

The credit ratings have been disclosed to North South Power Limited.

The rating above was solicited by the Issuer of the Transaction, GCR has been compensated for the provision of the rating.

The information received from the Arrangers, Guarantor and other reliable third parties to accord the bond rating included: Executed Programme Prospectus, Executed Series 1 Pricing Supplement, NSP-SPV Powercorp PLC incorporation documents, Executed Programme Trust Deed, Executed Series 1 Trust Deed, Executed Deed of Guarantee, Executed Recourse Agreement, Executed Account Bank Agreement, and Executed Legal Opinion from Templars.

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ALL GCR CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS, TERMS OF USE OF SUCH RATINGS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS, TERMS OF USE AND DISCLAIMERS BY FOLLOWING THIS LINK:HTTP://GCRRATINGS.COM. IN ADDITION, RATING SCALES AND DEFINITIONS ARE AVAILABLE ON GCR’S PUBLIC WEB SITE AT WWW.GCRRATINGS.COM/RATING_INFORMATION. PUBLISHED RATINGS, CRITERIA, AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. GCR's CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, COMPLIANCE, AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THIS SITE.

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