Visionscape Municipality Bond Default: An indictment on credit rating agencies?

Since news broke about the default of the terms of a N4.85bn (15.75% Series 1, Tranche B Secured Rate Medium Term Note due in 2022) issued by Municipality Waste Management Contractors Limited (MWMCL), many keen capital market players have wondered how this ‘orphaned’ bond was brought into the market in the first place.

Visionscape, FMDQ relationship

Who packaged this offer?

All pundits have yet to answer the question around who packaged the Offer, with a nominal face value of N1, 000 per unit, that opened on February 26, 2018, and closed on February 28, 2018, to investors.  The Issue price was 100% of par value and promised a coupon of 15.75% or N157.50 per unit.

FMDQ Backing

However, Nairametrics investigations indicate that FMDQ, and OTC Exchange, one of Nigeria’s latest entrants into the capital market may have also provided some backing for the defaulting bond. It will be recalled that Visionscape, the promoter of the bond was honoured with the FMDQ Debt Capital Market (DCM) Awards which was organized by the FMDQ OTC Securities Exchange, for this bond. At the award event, they received four awards for Innovation & Sustainability, Regulation & Compliance, Debts Products Listed & Quoted on FMDQ and Listings & Quotations Stakeholder.

Elated John

It was an elated John Irvine, Visionscape Africa, CEO that said “We are honored to be recognized by the management & Board of The FMDQ OTC Securities Exchange. Visionscape and its partners aim to be at the forefront of this historical project in Lagos, Nigeria and are proud to be part of the team bringing it to fruition. We will continuously strive to be the industry’s benchmark for social impact investments,”

Who should be blamed

The question that continue to plaque this transaction is who really should be blamed?

The apex capital market regulator, the Securities and Exchange Commission has issued a rebuttal. Part of the statement read “The Bond under reference was issued by Municipality Waste Management Contractors Limited, a private company promoted by Visionscape Sanitations Solutions Limited – under a N50Billion Medium Term Note Programme. But why did SEC not even query FMDQ on this transaction remain to be seen!

Culpable rating agency?

Other analysts have blamed the credit rating agencies of Agusto & Co  and GCR who awarded the Note an ‘A+’ Rating and an ‘A’ Rating respectively. Some other stakeholders have tackled the Lagos State Government that backed Offer by an Irrevocable Standing Payment Order (ISPO) of the Lagos State Government charged against the states Internally Generated revenue (IGR). Their grouse was that the government should come through with the payment irrespective of its internal dynamics or wranglings.

As usual, the investors are left to hold the short end of the stick in this transaction and Visionscape response has done nothing to ameliorate the situation.


  1. Please always get your fact before publishing anything. This is a very sensitive market, don’t mislead people with your article.
    There was a little delay in coupon payment and the next thing it was all over the media that the bond defaulted. what type of investigation did you conduct and who are the people you interviewed in the course of your query.


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