South Africa: Eskom gets mixed credit ratings

*Eskom Megawatt Park.

*Eskom Megawatt Park.

28 November 2015, Johannesburg – While credit ratings agency Moody’s rated Eskom as having a stable outlook on Friday, Standard & Poor’s gave the utility a negative outlook.

“Following the announcement of Eskom’s 2015 interim financial results this week, Moody’s Investors Service has affirmed Eskom’s Ba1 senior unsecured credit rating with a stable outlook. Standard & Poor’s (S&P) also affirmed Eskom’s local and foreign currency corporate credit rating at “BB+”, with a negative outlook,” Eskom said.

Both ratings agencies considered the government’s R23bn equity injection and the conversion of a R60bn subordinated loan into equity would support the liquidity and credit metrics of Eskom in the foreseeable future.

“We are pleased that the ratings agencies have affirmed Eskom’s credit rating. These constructive actions demonstrate the commitment by Eskom and the government to stabilise the liquidity position and credit matrices of the company,” said Eskom’s chief financial officer Anoj Singh.

He said Eskom would continue to implement initiatives that would ensure that the company achieved long-term financial sustainability while moving towards an improved credit profile.

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