Letshego downgraded
Moody's Investors Service has downgraded the corporate family ratings of Botswana Stock Exchange listed Letshego to Ba3 from Ba2 and affirmed its long-term issuer ratings at Ba3. “The outlook on Letshego changed to negative from stable,” said Moody’s.
According to Moody’s, the downgrade of the CFR primarily reflects the deterioration in the operating environment across some of the main Sub-Saharan African countries where Letshego operates, capturing both the fragile macro conditions and increased industry risks. “These more challenging conditions will weigh on Letshego's earning generation and asset quality metrics. More positively, the affirmation of the issuer ratings reflects the declining portion of secured funding as a percentage of total funding, which will neutralize structural subordination concerns for unsecured creditors, and allows Moody's to place the issuer ratings on par with the CFR,” said the credit rating agency. Meanwhile, Chief Executive of Letshego, Auoa Monyatsi said the business remains strong.
“Letshego’s business fundamentals remain strong, reflected in Moody’s affirming and maintaining Letshego’s corporate issuer rating at Ba3, for 11 years. With markets, like Ghana, experiencing a Moody’s downgrade in long term issuer ratings, we remain steadfast in weathering downside economic conditions by maintaining business resilience and progressive execution of our Group Transformation Strategy, “said Monyatsi. Letshego, a leading micro-lender has operations in 11 sub-Saharan African markets, including Eswatini, Ghana, Kenya, Lesotho, Mozambique, Namibia, Nigeria, Rwanda, Tanzania and Uganda.