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An emerging market ratings agency, GCR, has affirmed Sterling Investment Management SPV Plc.’s series 1 and 2 bonds’ ratings of BBB-(NG) with outlook accorded as stable.
According to the rating note, the series 1 and Series 2 Bonds were issued under Sterling Investment Management Special Purpose Vehicle Plc.’s N65 billion debt issuance programme sponsored by Nigerian tier-2 lender, Sterling bank.
The rating is accorded based on Sterling bank Plc.’s credit standing and financial position as sponsor of the debt capital raise, GCR noted. The detail indicates that 60% of the proceeds of the issuance will be used to purchase subordinated notes issued by Sterling Bank Plc.
It stressed further that the remaining 40% would be held in debt service reserve fund and invested in Federal Government of Nigeria securities. GCR added that the Bonds are backed by an irrevocable and unconditional undertaking under the Deed of Undertaking between the Sterling Bank and its particular purpose vehicle.
“While the Issuer is Sterling SPV, repayment of the obligations under the Issues ultimately depends on the Sponsor’s performance, as the direct obligor of the Issues”, the rating note explained.
“The bank’s periodic performance reports provided to GCR by the Trustees to the Bondholders hint that the issuer has been meeting all its obligations on a timely basis on both the Series 1 and 2 Bonds”, it explained.
Outlook Statement
The stable outlook, according to GCR reflects the rating firm’s opinion that Sterling bank will pursue its growth and diversification strategy over the next 12-18 months while maintaining its sound risk position as well as mitigating material weakening in capitalisation.
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