JOHANNESBURG: The African Union's ‍ratings watchdog warned on ‍Tuesday that Fitch Ratings risked "misinforming investors" if it continued to ​issue credit assessments of Afreximbank after the lender severed its ties to the "Big Three" firm.

The bank, ⁠formally known as the African Export-Import Bank (Afreximbank), announced the decision on Friday, citing concerns over the ⁠quality of ‌the agency's approach.

In a statement issued on Monday, the AU's African Peer Review Mechanism said it considered Afreximbank's decision justified.

“Any future ratings issued ⁠by Fitch in respect of the Bank would be unsolicited and non-participatory, and therefore risk misinforming investors,” the APRM said in a statement.

Fitch declined to comment on the APRM's position.

Fitch cut Afreximbank's credit rating to one notch above "junk" ⁠status in June, citing high ​credit risks and weak risk-management policies, and put it on a "negative outlook" - rating agency terminology warning of another ‍future downgrade.

The APRM said it did not consider Afreximbank's decision related to the downgrade and said that ​disagreements over the quality of Fitch's "rationale, analytical framing, and interpretation of risk sources" were sufficient grounds to sever ties.

The AU and some African nations allege that the so-called "Big Three" ratings agencies – Moody's, Fitch and S&P Global Ratings – do not fairly assess the risk of lending in Africa, driving borrowing costs.

All three agencies have denied bias and say their ratings follow the same formula across continents.

Afreximbank, which specialises in trade and project finance, is facing questions over whether it has "preferred creditor status", which would shield its loans to ⁠debt-distressed countries like Ghana and Zambia from losses in ‌debt defaults.

Fitch has warned that any weakening of Afreximbank's preferred creditor status could lead to future ratings actions.

Afreximbank is also rated by Moody's, which downgraded it ‌to two notches ⁠above "junk" in July, though the agency has never given it a ratings "uplift" for preferred creditor ⁠status. (Reporting by Colleen Goko; Editing by Libby George and Joe Bavier)