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Moody's, Standard & Poors: Eskom rating outlook remains negative
ESI-Africa reports that Moody's Investors Service downgraded its rating of Eskom's bonds by one notch following the ratings agency's earlier revision of the South African sovereign bond rating. The South African electricity public utility's senior unsecured bond rating has been reduced to Baa3 on the Moody's scale, from Baa2, and the outlook on the rating remains negative.
Moody's states that the weakening of the South African government's credit profile directly affects the rating of Eskom. Standard & Poors has also maintained its negative outlook on Eskom, affirming its rating, which stands at BBB+ on the Standard & Poors scale. Eskom is in the middle of a R340b new build programme to provide electricity infrastructure which is urgently needed to support South Africa's economic growth and development. The utility already has more than R180b of debt on its balance sheet, from local and international financial markets.
Credit ratings by Moody's and Standard & Poors influence the cost and availability of Eskom's debt. "We have taken note of the rating agencies' analysis of the challenges facing Eskom," Eskom CEO Brian Dames says. "Their comments highlight the electricity industry's need for regulatory and policy certainty, as well as the need for Eskom to be financially sustainable."
Read the full article on www.esi-africa.com.
