Rating agency cites missed debt payments and lack of reliable financial records for decision….
The financial challenges surrounding Geregu Power Plc have deepened after Agusto & Co withdrew the “A-” credit rating assigned to the electricity generation company and its N40.09 billion Series 1 Senior Unsecured Bond.
The rating agency announced the withdrawal after Geregu Power missed its eighth coupon payment and fourth principal repayment on the bond.
Agusto & Co said its decision was based not only on the payment default but also on its inability to obtain sufficiently reliable information to maintain an independent assessment of the company’s creditworthiness.
The Lagos-based rating agency disclosed that the company’s management had informed it that previously issued financial statements were undergoing an independent verification process.
As a result, Agusto said it could no longer rely on the audited financial statements currently available.
“Pending completion of this review, Agusto & Co is unable to rely on the current audited financial statements and, therefore, cannot provide an opinion regarding the Company’s creditworthiness,” the agency said.
The Series 1 bond was issued to support the expansion of Geregu Power’s electricity generation capacity and had previously carried an “A-” rating, indicating strong credit quality and a low expectation of default risk.
The latest development represents a significant deterioration in the bond’s credit profile, particularly as the missed coupon and principal payments constitute the first disclosed default event on the instrument since its issuance.
Agusto & Co said it would reconsider the company’s rating after the completion of the ongoing independent forensic review and the receipt of reliable audited financial statements for the year ended December 31, 2025.
However, the agency did not provide a timeline for the completion of either process.
“We will undertake a reassessment of the Company’s rating upon completion of the ongoing independent forensic review and receipt of reliable financial statements for the year ended 31 December 2025,” it said.
The withdrawal leaves bondholders and other market participants without Agusto’s independent assessment of Geregu Power’s credit risk until the company’s financial information can be independently verified.
The development comes as Nigerian companies increasingly turn to the domestic debt market to finance investments, including in the power sector, amid persistent naira volatility and high borrowing costs.
The combination of a payment default and questions surrounding the reliability of the company’s financial statements is expected to attract increased attention from bondholders, trustees and other participants monitoring credit risks in Nigeria’s power sector.
