Ahead of today’s (Thursday June 15, 2017) road-show for Nigeria’s $300 million Diaspora Bond, international rating agency, Fitch Ratings has assigned Nigeria’s upcoming dollar denominated senior unsecured bonds a rating of ‘B+(EXP)’.
The rating agency yesterday said it assigned the rating after the receipt of final documents materially conforming to information already reviewed. It said in a statement that the rating is in line with Nigeria’s Long-Term Foreign-Currency Issuer Default Rating (IDR) of ‘B+’. The rating agency had issued a negative outlook on the IDR of the country.
According to Fitch, the rating is sensitive to changes in Nigeria’s Long-Term Foreign-Currency IDR. On 24 January 2017, Fitch affirmed Nigeria’s Long-Term Foreign-Currency IDR at ‘B+’ and revised the Outlook to Negative. The Long-Term Local-Currency IDR was also affirmed at ‘B+’ with a Negative Outlook.
Earlier in the year, Fitch had assigned B+ ratings to Nigeria’s $1 billion Eurobond which was eventually oversubscribed. A B+ rating is usually the lowest investment grade rating assigned to a security which signifies that the issuer (Nigeria) has a moderate chance of default. However, some analysts believe that a deeper assessment shows the concerns foreign investors have about the country’s macro-economic and foreign exchange policies.
While the Central Bank of Nigeria has been able to keep rates steady by ensuring liquidity in the foreign exchange market, some analysts express worry that another falling global oil price will take the country back to fighting the forex challenge it faced last year and early this year.