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S&P sees more ratings for Nigeria and Kenya

15 July 2014, 21:07

London - Standard & Poor's expects to rate a number of Nigerian banks this year and is talking to some Kenyan banks and companies about future credit ratings, its managing director for sub-Saharan Africa today.

Borrowers across the continent are looking to tap international capital markets following successful bond sales by African countries.

A long-awaited rating for Tanzania is not likely to be assigned any time soon, however, S&P's Konrad Reuss told a news briefing in London.

"More Nigerian bank ratings will be coming out later this year we are working on a number of corporates in the region," Reuss said.

Borrowers in frontier markets such as Africa have turned to capital markets as aid funding dries up and monetary easing across the western world keeps interest rates low.

A flood of new issues from sub-Saharan Africa in the past couple of years includes a recent debut dollar bond from Nigerian bank Diamond Bank. First Bank of Nigeria is holding a bond roadshow this week, according to Thomson Reuters service IFR.

These bonds follow sovereign dollar debt issuance from Nigeria, which analysts say helped to familiarise investors with the West African economy.

Kenya issued a well-received $2 billion dollar bond last month, its first in international markets.

"We are reaching out to Kenya," Reuss said, referring to plans to discuss ratings with local banks and corporates in the East African country. "On the back of a very successful sovereign bond, a benchmark has been set."

Tanzania, which has also said it plans to launch a debut Eurobond, has not yet gained a rating.

"Time and time again, the government has made announcements, time and time again those plans were delayed," Reuss said, adding that any ratings timescale was difficult to predict "because of the many delays that we have seen so far".

S&P officials said they were watching security issues in both Nigeria and Kenya.

S&P changed the outlook on Nigeria's BB- rating to negative in March, before the abduction in April of more than 200 schoolgirls by militant group Boko Haram.

"(Boko Haram) was part of what we considered when we put Nigeria on negative outlook," said Ravi Bhatia, director in sovereign ratings at S&P.

"It's gotten slightly worse, it's a concern - it's not at this point destabilising the Nigerian state."

S&P rates Kenya, where gunmen have killed about 100 people since mid-June in coastal raids, at B+ with stable outlook.

The killings were not having a more widespread impact on the Kenyan economy so far, S&P said. 

- Reuters


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