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Standard & Poor’s and Moody’s announce actions on Eskom’s credit ratings
Friday, 7 April 2017: Following the announcement of the Standard and Poor’s and Moody’s Ratings decisions on Eskom’s credit ratings, Anoj Singh, Chief Financial Officer said, “In line with the execution of our funding plan, 72% of the current fiscal year’s funding amounting to R72 billion will be secured by end April 2017, thus the funding requirement for FY17/18 is not compromised. We are confident that we will successfully execute Eskom’s funding plan over the next five years backed by the availability of the government guarantees; the only challenge that Eskom will have to contend with will be the higher cost of debt.”
Anoj Singh’s comments follow Standard and Poor’s Global Ratings (S&P) announcement that the rating agency has lowered its long-term corporate credit rating on Eskom to ‘B+’ from ‘BB-’; following the ratings action announced by S&P on Monday, 03 April to downgrade South Africa’s long-term foreign currency rating credit rating to ‘BB+’.
On Wednesday, 05 April 2017, Moody’s Investor Services also announced their decision to place Eskom’s Ba1 senior unsecured Medium Term Note (MTN) rating on review for downgrade; the rating agency has simultaneously placed Eskom’s global scale (GSR) corporate family rating (CFR) of Ba1 and its national scale rating of on review for downgrade. Moody’s review decision on Eskom also follows the rating agency’s decision to place the Sovereign’s Baa2 bond rating on review for downgrade also on Monday, 03 April 2017.