NAIROBI, 28 March, 2018 – Following a review meeting, S&P Global Ratings (S&P) revised the African Trade Insurance Agency’s (ATI) outlook to stable from negative and also affirmed the company’s ‘A’ issuer credit rating. ATI has been rated ‘A’ by S&P for the last 10 years.
The removal of the negative outlook is based on significant progress made by ATI in curing member-state sovereign and sub-sovereign payment delays as well as ATI’s expanded shareholder membership, which in the last 18 months included new shareholders Ethiopia, Zimbabwe, Côte d’Ivoire, South Sudan, and UK Export Finance. ATI’s capital and reserve base now stand at USD242 million and its net income was USD10 million in 2017.
This new shareholder capital injection coupled with the resolution of most of ATI’s sovereign and sub-sovereign payment delays “reinforces ATI’s strong business profile and strong capital position,” noted S& P in its final report.
The payment delays in a handful of countries had accrued since 2015. Of these, ATI has cured USD10 million (70%) of these payment delays over the last six months and no further arrears have occurred. S&P also noted that his action provides “support of our assessment of ATI’s preferred creditor status.”
George Otieno, ATI’s Chief Executive Officer, added “Our strategy in the last year has been to actively engage our member governments and to seek out strategic partnerships with international financial institutions and other multilaterals as a way to leverage our position within the markets we do business. Over the next few years, ATI targets an eventual upgrade to an A+ rating.”
In its report, S&P concluded that they “could raise the ratings over the next two years if expanded shareholder membership, combined with substantial capital injections increases ATI’s total adjusted capital sustainably beyond USD250 million.”