Fitch affirms Kaduna state at ‘B’, with stable outlook

Fitch Ratings has affirmed Nigeria’s Kaduna State’s Long-Term Foreign- and Local-Currency Issuer Default Ratings (IDRs) at ‘B’ with a Stable Outlook. Kaduna’s National Rating has been affirmed at ‘A+(nga)’.

In Fitch’s recent report, the ratings reflect that Kaduna’s revenue structure remains dependent on oil transfers despite increasing internally generated revenues (IGR). The ratings also factor in the state’s growing debt to fund necessary capital expenditure (capex) for the development of basic infrastructure and social services. Kaduna’s International Dository Receipts (IDRs) are aligned with the Nigerian sovereign’s and no other rating factor applies to the ratings.

Fitch assesses Kaduna’s Standalone Credit Profile (SCP) at ‘b’, reflecting the combination of a ‘Vulnerable’ risk profile and debt sustainability metrics in the ‘bb’ category under its rating case scenario.

Fitch assesses Kaduna’s risk profile as ‘Vulnerable’, which combines five factors assessed as ‘Weaker’ (Revenue Robustness and Adjustability, Expenditure Sustainability, Liabilities and Liquidity Robustness and Flexibility) and one factor as ‘Midrange’ (Expenditure Adjustability).