Afreximbank downgraded again, as Moody’s joins Fitch to raise flags on non-performing loans

The African Export-Import Bank (Afreximbank) has been downgraded by Moody’s from Baa1 to Baa2, its second cut in four weeks.

The move, analysts from Access Bank Group noted, reflected weaker asset quality from unsecured loans to distressed sovereigns like Ghana and Zambia, both undergoing debt restructuring.

“These loans pose potential losses, as both countries are restructuring debt under the G20’s Common Framework, requiring comparable losses for Afreximbank.

“Afreximbank has argued that it shouldn’t take losses because it has preferred-creditor status, meaning borrowers can’t compel it to rework its loans. Moody’s also noted the bank’s limited funding sources,” according to analysts from the group.

Moody’s also cited Afreximbank’s limited funding sources.

This followed last month’s downgrade by Fitch, which flagged rising non-performing loans.

Access analysts said the consecutive downgrades underscore growing risks for the lender, though its preferred-creditor status offers some protection.

The bank’s 2029 dollar bond held steady at US$91.74 on Wednesday.

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