Fitch and Moody’s re-affirm GuarantCo’s credit rating of AA- and A1 respectively
International rating agencies, Fitch and Moody’s, have affirmed GuarantCo’s ratings of AA- and A1 respectively, both with negative outlook.
Fitch confirmed that the affirmation reflects the maintained financial soundness of GuarantCo’s funders, the company’s exceptionally strong risk-adjusted capitalisation and low risk investment portfolio. As in previous years, Fitch has given GuarantCo, a Private Infrastructure Development Group (PIDG) company, a stand-alone credit rating of A which was uplifted to AA- due to GuarantCo’s strong shareholder support including the governments of the United Kingdom, Switzerland, Australia and Sweden, through the PIDG Trust and the Netherlands, through FMO and the PIDG Trust. Fitch continues to assess GuarantCo’s liquidity and capitalisation as ‘very strong’, with the addition of new funding from Agence Française de Développement (AFD), in the form of a stand-by facility, having positively impacted the net par to capital ratio which Fitch use to assess capitalisation.
In December 2020, AFD provided GuarantCo with a EUR 100 million callable funding facility with a tenor of 15 years and in May 2021 Global Affairs Canada (GAC) committed CAD 40 million (c. USD 31.8 million) through a repayable facility providing further funder diversification whilst strengthening GuarantCo’s liquidity buffers.
Moody’s referred to GuarantCo as an “innovative business with high development impact” in their report. Their assessment of GuarantCo’s capital position has been balanced by continued recognition of strong liquidity buffers, including Moody’s opinion that GuarantCo is “establishing a track record of pro-actively managing its stressed exposures and recovering impaired assets” and high shareholder support which was bolstered by the addition of AFD and GAC.
Emily Bushby, Interim CEO of GuarantCo, said: “We are proud that both Fitch and Moody’s have re-affirmed our credit ratings. The diversification of our funding base through the investment of Agence Française de Développement to be spent on climate adaptation and mitigation infrastructure projects and the funding by Global Affairs Canada to be invested in projects that support gender advocacy will further strengthen shareholder confidence and help grow GuarantCo’s portfolio. This will enable us to achieve our strategic and development objectives with the associated positive impact to our external stakeholders and people in lower income countries across Africa and Asia who will benefit from the essential infrastructure projects that we finance.”
GuarantCo mobilises private sector local currency investment for infrastructure projects and supports the development of financial markets in lower income countries across Africa and Asia. GuarantCo is part of the Private Infrastructure Development Group (PIDG) and is funded by the governments of the United Kingdom, Switzerland, Australia and Sweden, through the PIDG Trust, the Netherlands, through FMO and the PIDG Trust, France through a stand-by facility and Global Affairs Canada through a repayable facility. GuarantCo is rated AA- by Fitch and A1 by Moody’s. GuarantCo’s activities are managed by GuarantCo Management Company which is part of Cardano Development. www.guarantco.com
The Private Infrastructure Development Group (PIDG) is an innovative infrastructure project developer and investor which mobilises private investment in sustainable and inclusive infrastructure in sub-Saharan Africa and south and south-east Asia. PIDG investments promote socio-economic development within a just transition to net zero emissions, combat poverty and contribute to the Sustainable Development Goals (SDGs). PIDG delivers its ambition in line with its values of opportunity, accountability, safety, integrity and impact. Since 2002, PIDG has supported 171 infrastructure projects to financial close which provided an estimated 217 million people with access to new or improved infrastructure. PIDG is funded by the governments of the United Kingdom, the Netherlands, Switzerland, Australia, Sweden, Germany and the IFC. www.pidg.org