GCR has withdrawn Zamfara State Government’s (“Zamfara”) domestic issuer rating of BBB(NG) (triple B) and N18.75bn 15.5% fixed rate bond rating of A-(NG) (single A minus). According to GCR’s rating definitions, the issuer rating reflected adequate credit quality. Protection factors were considered to be sufficient, although there is considerable variability in risk during economic cycles. The comparatively higher bond rating was underpinned by the fact that it was secured by an Irrevocable Standing Payment Order issued by the Federal Government.
Notwithstanding the fact that the initial requisite approval for the bond issuance was received from the Nigerian Securities and Exchange Commission (“SEC”) in 2011, the actual placement of the bond has been persistently delayed due to non-compliance with other SEC regulatory requirements, as well as non-compliance with the Pension Commission’s requirements. As the issuer and bond rating have since reached expiry, GCR has accordingly withdrawn these ratings pending a full rating review of Zamfara State and all requisite approvals being received for the bond placement.
CREDIT RATINGS ISSUED AND RESEARCH PUBLICATIONS PUBLISHED BY GCR, ARE GCR’S OPINIONS, AS AT THE DATE OF ISSUE OR PUBLICATION THEREOF, OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES. GCR DEFINES CREDIT RISK AS THE RISK THAT AN ENTITY MAY NOT MEET ITS CONTRACTUAL AND/OR FINANCIAL OBLIGATIONS AS THEY BECOME DUE. CREDIT RATINGS DO NOT ADDRESS ANY OTHER RISK, INCLUDING BUT NOT LIMITED TO: FRAUD, MARKET LIQUIDITY RISK, MARKET VALUE RISK, OR PRICE VOLATILITY. CREDIT RATINGS AND GCR’S OPINIONS INCLUDED IN GCR’S PUBLICATIONS ARE NOT STATEMENTS OF CURRENT OR HISTORICAL FACT. CREDIT RATINGS AND GCR’S PUBLICATIONS DO NOT CONSTITUTE OR PROVIDE INVESTMENT OR FINANCIAL ADVICE, AND CREDIT RATINGS AND GCR’S PUBLICATIONS ARE NOT AND DO NOT PROVIDE RECOMMENDATIONS TO PURCHASE, SELL OR HOLD PARTICULAR SECURITIES. NEITHER GCR’S CREDIT RATINGS, NOR ITS PUBLICATIONS, COMMENT ON THE SUITABILITY OF AN INVESTMENT FOR ANY PARTICULAR INVESTOR. GCR ISSUES ITS CREDIT RATINGS AND PUBLISHES GCR’S PUBLICATIONS WITH THE EXPECTATION AND UNDERSTANDING THAT EACH INVESTOR WILL MAKE ITS OWN STUDY AND EVALUATION OF EACH SECURITY THAT IS UNDER CONSIDERATION FOR PURCHASE, HOLDING OR SALE.
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