The African Export-Import Bank terminated its relationship with credit ratings firm Fitch this Friday, due to what it said was a “firm belief” that the agency’s rating approach no longer reflected an understanding of the bank’s mission and mandate.

Fitch cut Afreximbank’s credit rating to one notch above ‘junk’ status last year and has it on a ‘negative outlook’ rating agency terminology for another downgrade warning.

That outlook, Fitch said, reflected a worry that debt owed to Afreximbank might end up getting restructured in yet to be finalised debt reworks in countries such as Ghana and Zambia.

That in turn, would effectively end a debate over whether the Cairo-based lender has the same ‘Preferred Creditor Status’ enjoyed by the likes of the International Monetary Fund and World Bank and protects their loans from restructurings.

Afreximbank said its decision to sever ties with Fitch was due to its “firm belief that the credit rating exercise no longer reflects a good understanding of the Bank’s Establishment Agreement, its mission and its mandate”.

It added it “remains robust, underpinned by strong shareholder relationships and the legal protections signed and ratified by its member states.”

Fitch declined to comment.

Afreximbank, whose shareholders include African sovereigns as well as private investors, is viewed by many as an important source of capital for African countries, particularly when international bond markets are closed to them and as rich countries cut aid and concessional lending.

United States investment bank JPMorgan cut its view on Afreximbank bonds this month, citing concerns that Fitch could cut its rating to junk following a report it would take a loss on Ghanaian loans.

–Reuters–