Moody’s acquires Mauritius-based GCR Ratings to deepen Africa presence
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TLDR
- Moody’s Corporation fully acquires Global Credit Rating (GCR), a leading credit rating agency in Africa, to expand its presence in the region.
- The acquisition of a majority 51% stake in GCR by Moody’s aims to meet the growing demand for credit rating services in Africa.
- GCR, based in Mauritius and operational across multiple African countries, will maintain its rating methodologies, issue credit ratings, and retain its management team despite the acquisition.
Moody’s Corporation has fully acquired Global Credit Rating (GCR), a leading credit rating in Africa, accounting for most of the ratings issued in the region. The terms of the transaction remained undisclosed and will not affect Moody’s 2024 financial results.
In 2022, Moody’s acquired a majority 51% stake in GCR to expand its footprint in the African continent with anticipation of increased demand for credit rating services. Despite the acquisition, GCR will continue to use its rating methodologies, issue its credit ratings, and maintain a separate management team.
With over three decades of practice, the Mauritius-based GCR focuses on rating companies and institutions that borrow local currencies in the continent and has operations across Kenya, South Africa, Mauritius, Nigeria, Zimbabwe, and Senegal.
Key Takeaways
Moody's activities in Africa come at a time when there is increasing criticism of the assessments made by international rating agencies. In a report published in September 2023, the African Peer Review Mechanism (APRM), an arm of the African Union, highlighted the glaring shortcomings of these foreign agencies' methods in Africa, suggesting that their perception of investment risk is consistently higher than the actual risk. In addition, the African Union plans to launch its rating agency this year to provide the continent with an "objective" tool for assessing investment risk. This initiative aims to help African states mobilize resources at more competitive rates.
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