LONDON: Investment bank JP Morgan switched its view on African Export & Import Bank (Afrexim) bonds to 'overweight' ‍from 'underweight' on ‍Monday, saying their selloff after a high profile credit ​rating cut last week had made them attractive again.

Fitch downgraded Afreximbank to 'junk' status ⁠last week on the basis that an agreed hit to the bank's ⁠loans to default-stricken ‌Ghana was a sign it did not benefit from so-called "preferred creditor status", which traditionally protects development lenders during defaults.

Afrexim, ⁠whose main shareholders are African governments, had severed ties with Fitch over its treatment of the bank.

"We think that this (selloff in Afrexim bonds) has created more value in these bonds and ⁠made these attractive relative ​to benchmarks," JP Morgan analysts said as they changed their view to "overweight" - effectively a buy recommendation.

Fitch ‍followed its downgrade by also withdrawing its Afrexim rating as a result of ​Afrexim severing its relationship with the agency. It had been a "solicited" rating, meaning the bank had paid Fitch to provide and maintain it.

It leaves Moody's as the only major agency to still rate the bank now. Moody's hasn't signalled it will follow Fitch. That means Afrexim’s bonds will remain in JP Morgan's influential investment grade-only bond indexes as long as Moody's holds off.

JP Morgan analysts, which are separate ⁠to the index arm of the bank, said ‌Afrexim should be able to adjust its lending practices to reduce the risk of being involved in further sovereign debt restructurings.

"Sovereigns should ‌also remain ⁠supportive to Afrexim and keep giving it preferred treatment wherever they can," ⁠they added. (Reporting by Marc Jones; Editing by Susan Fenton)