TheCable

Moody’s, a global integrated risk assessment firm, says it has concluded plans to acquire a 51 percent majority stake in Global Credit Rating Company Limited (GCR).

This will likely boost Africa’s credit rating sector, providing a healthy financial market and investors make informed investment decisions.

A credit rating company or agency is a private company that assesses the creditworthiness of a large-scale borrower, such as a company or country. 

Speaking on the acquisition, Rob Fauber, president and chief executive officer of Moody’s, said the combination of GCR’s successful domestic operations with Moody’s global expertise would create a unique opportunity to expand in a high-growth region.

Fauber said GCR’s ratings play a significant role in the growth of Africa’s financial markets by providing critical insights into credit across a range of economies and sectors.

Marc Joffe, chief executive officer of GCR, who described the buy as an “important milestone in the history of GCR,” said the transaction will enable them to build on their deep local market insights and a quarter-century of growth across the continent.

GCR operations span the continent, including South Africa, Nigeria, Senegal, Kenya, and Mauritius.

“It will also provide the opportunity to further develop solutions that meet a range of customer needs, including credit ratings, credit risk solutions, and ESG capabilities,” Joffe said.

Moody’s said it is committed to economic transformation in South Africa and sees empowerment as an important part of the future success of its investment in GCR.

The credit rating agency added that it would engage with a South Africa-based empowerment partner to provide local strategic support through substantial equity participation and representation on the GCR South Africa board.

Following the transaction, GCR said it would continue to develop its own rating methodologies, issue credit ratings, and maintain a separate management team.

The transaction, which is subject to customary regulatory approvals, is expected to close in the second quarter of 2022.

Speaking to TheCable on the acquisition, Abimbola Adeseyoju, managing director, DataPro, a Nigerian-based rating agency, lauded the development, describing it as a win for the industry. 

He said Moody’s presence in Nigeria would draw traffic to rating potentials and value propositions and open up more possibilities.

“It’s a win-win for everybody,” he said. 

“We welcome new developments that will add value to the sector and provide the impetus for new offerings needed for increased efficiency in capital and resource allocation in Nigeria.”