Real estate firm retains high ratings

Global Credit Ratings (GCR) Limited has affirmed the national scale long-term and short-term issuer ratings of BBB+(NG) and A2(NG) for Lekki Gardens Estate Limited.

GCR also upheld the national scale long-term issue rating of A(NG)(EL) accorded to Lekki Gardens Estate (LGE) Limited’s N3.5 billion Senior Secured Fixed Rate Bond. It described the outlook on the ratings as stable.

GCR stated that the rating affirmation and stable outlook reflected the company’s strong competitive position which will continue to underpin sustainable earnings and cashflow, while maintaining a modest funding profile.

The report noted that company’s business profile would help mitigate the increased risks within the operating environment.

According to the report, LGE remained resilient despite the prevailing economic conditions with revenue growth in 2021, underpinned by rising off-take and sale volumes. The company recorded earnings before interest, tax, depreciation and amortisation of over 15 per cent in first half 2022, well above peers.

GCR stated that the rating of the bonds followed the receipt of final and executed transaction documents, which was 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 a full recovery.

Speaking on the relevance of the ratings, Chief Executive Officer, Lekki Gardens Estate Limited, Dr. Richard Nyong said 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.

He pointed out that 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.