South African rating agency GCR has upgraded Shelter Afrique Development Bank’s (ShafDB) international scale long issuer rating to B from B-, while affirming the short-term national scale issuer rating of B. The outlook for both ratings has been accorded as stable.
Additionally, GCR has upgraded the long and short-term national scale issuer ratings for Kenya to AA-(KE)/A1+(KE) from A+(KE)/A1(KE); Nigeria to AA+(NG)/A1+(NG) from AA(NG)/A1+(NG); and Mauritius to BB+(MU)/B(MU) from BB(MU)/B(MU). All three national ratings also hold a stable outlook.
The agency has further upgraded the Nigerian national scale long-term issue rating on the Series 1 Tranche A and Tranche B Senior Unsecured Notes, aligning them with the Nigerian issuer credit rating. These notes are part of Shelter Afrique’s ₦200 billion Domestic Bond Issuance Programme, with proceeds funding affordable housing development projects and lines of credit for housing developers in Nigeria.
“The upgrade of Shelter Afrique Development Bank’s ratings reflects its improved status, a growing track record of preferential creditor treatment (PCT), and enhanced membership strength and diversity. These improvements result from its transition to a treaty-based establishment and strategic agreements addressing capital arrears,” GCR commented.
In October 2023, Shelter Afrique rebranded from The Company for Habitat and Housing in Africa to Shelter Afrique Development Bank (ShafDB), updating its statutes to reflect its new status as a development bank.
“We set out to position the institution for growth through transformation into a development bank which has so far yielded improved operational, financial performance, and governance. Our elevation into a Development Bank now sets the stage for a renewed, innovative, and impactful Shelter Afrique,” stated ShafDB Managing Director Mr. Thierno-Habib Hann.
GCR highlighted the establishment of ShafDB as a significant development, noting that “this structural shift has solidified Shelter Afrique Development Bank’s legitimacy and operational framework, which is critical in reinforcing confidence among current and potential members. We view the diverse membership base (on a regional basis) and treaty establishment as ratings positive.”
“Our resolve is to sustain the transformative journey that we embarked on two years ago. We expect to sustain significant improvements in our capital and funding structure, asset quality, developmental impact, and overall enterprise risk management,” said ShafDB Head of Risk Management Mr. Bernard Oketch.
Shelter Afrique Development Bank’s shareholder base includes 46 shareholders: 44 member states under “Category A” shareholding, African Development Bank (AfDB), and Africa Reinsurance Corporation (Africa-Re) under “Category B” shareholding. There is also a “Category C” shareholding for non-African institutions and states interested in joining as shareholders.