Global rating agency, Fitch Ratings has assigned Access Bank's $400 million subordinated debt (Tier 2 notes) a final rating of 'B-' and Recovery Rating of 'RR6'.
The notes, issued directly through the bank, have a coupon set at 9.25 per cent and expected to mature on June 24, 2021 with a five-year call option.
The notes are part of the bank's $1 billion GMTN programme.
According to Fitch, the notes are subordinated, but there is no contractual non-viability loss absorption such as coupon flexibility, principal loss absorption or equity conversion features.
The agency noted that the Access Bank debt issue qualifies as tier 2 regulatory capital under current Central Bank of Nigeria regulations. “Fitch has rated the notes one notch below Access's Viability Rating (VR) of 'b' to reflect below average loss severity for subordinated debt, relative to senior debt.
“No additional notches for non-performance risk have been applied. The notes' rating is sensitive to a change in Access's VR.
“In addition, the notching of the rating against the bank's VR could also potentially widen if Fitch believed that the recoveries available to the subordinated noteholders would be lower than currently assumed,” a statement from Fitch explained.