...Rating Action: Fitch Ratings has upgraded Lagos State's National Long-Term Rating to `AAA(nga)' from `AA+(nga)' with a Stable Outlook and affirmed its Issuer Default Ratings (IDRs). The upgrade of the National Rating reflects Lagos's strength compared with national peers and its resilient operating performance during the pandemic, which supports its debt service. Rating Derivation Summary: The IDRs reflect Lagos's weaker risk profile by international standards against Fitch's expectations of rising but sustainable adjusted debt, coupled with sound debt sustainability driven by internally generated revenue (IGR), as evidenced by the state's Standalone Credit Profile (SCP) of `bb+'. The IDRs incorporate the sovereign rating cap, and the Stable Outlook on the IDRs mirrors that on the sovereign ratings. Risk Profile - `Weaker': Lagos's `Weaker' risk profile reflects Fitch's view of a high risk relative to international peers that the issuer's ability to cover debt service with the operating...
