Global Credit Ratings Limited (GCR) has affirmed the national scale long-term and short-term issuer ratings of BBB+(NG) and A2(NG), respectively, for the foremost real estate company, Lekki Gardens Estate Limited. GCR also upheld the national scale long-term issue rating of A(NG)(EL) accorded to Lekki Gardens Estate Limited’s N3.5bn Senior Secured Fixed Rate Bond Issue. It described the outlook on the ratings as stable.
GCR stated that the rating affirmation and stable outlook reflect the company’s strong competitive position which will continue to underpin sustainable earnings and cashflow, while maintaining a modest funding profile. This would help mitigate the increased risks within the Nigerian operating environment.
It was further noted that LGE remained resilient despite the prevailing economic conditions with revenue growth in FY21, underpinned by rising off-take and sale volumes, registering EBITDA margins at over 15% in 1H FY22 well above peers.
According to GCR, the rating of the bonds follows the receipt of final and executed transaction documents, which is derived through an assessment of the stressed estimated recovery rate expected from the market values of the mortgaged properties. Utilizing these inputs, GCR’s estimated recovery calculation shows that the secured bondholders can expect full recovery.
Speaking on the relevance of the ratings, the CEO, Dr. Richard Nyong revealed that the investment grade ratings bear testimony to the company’s strong financial position as well as its capacity to meet its financial obligations to all stakeholders.
The Company currently ranks as one of the leading property development companies in Nigeria, with a relatively strong track record, having delivered over 15,000 housing units across the residential, commercial, and retail property segments.
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