Geregu Power’s bond crisis deepens as Agusto withdraws rating

Agusto & Co has withdrawn the “A-” rating it had assigned to Geregu Power PLC and the company’s N40.09 billion Series 1 Senior Unsecured Bond, after the Nigerian electricity generating company missed its eighth coupon payment and fourth principal repayment on the note.

The Lagos-based rating agency said the withdrawal was driven by a combination of the default itself and a separate determination that it no longer has access to information reliable enough to support a credit opinion on the company.

“Management has advised that previously issued financial statements are undergoing an independent verification process,” Agusto & Co said.

Until that review is complete, the agency said it cannot place any reliance on the audited accounts currently in circulation, and is therefore not in a position to express a view on the company’s creditworthiness.

“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, issued to help fund expansion of Geregu Power’s generation capacity, had carried an “A-” rating, a grade denoting strong credit quality with low expectation of default risk, before Friday’s action.

Rating withdrawals of this kind typically leave bondholders and other market participants without an independent benchmark for the issuer’s risk profile until fresh, verifiable financial data becomes available.

Agusto & Co said it would revisit its assessment of Geregu Power once completion of the ongoing independent forensic review and receipt of reliable audited financial statements for the year ended December 31, 2025.

No timeline was given for either milestone.

“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,” Agusto & Co said.

The missed coupon and principal payments mark the first default event disclosed on the bond since issuance and come at a time when Nigerian corporates have increasingly leaned on the local debt capital markets to fund power-sector investment amid persistent naira volatility and elevated borrowing costs.

A default by a rated issuer, paired with questions over the integrity of its financial reporting, is likely to draw scrutiny from bondholders, trustees and other market participants tracking credit conditions in the sector. (BusinessDay)