Fitch affirms Eskom at BBB-; revises outlook to negative

8 December 2016  

Fitch Ratings has affirmed it’s ‘BBB-‘ long-term local currency Issuer Default Rating (IDR) on Eskom and revised the company’s outlook to negative from stable. The revision of Eskom’s outlook reflects the change in outlook on South Africa’s long-term IDR to negative from stable as announced by Fitch on Friday, 25 November 2016. 

In their assessment, Fitch acknowledges Eskom’s continued access to funding supported by the GFA; addition of new capacity to the grid; and improved operational performance which resulted in an improvement of the company’s Energy Availability Factor (EAF) as some of the elements that are yielding positive results for Eskom’s business profile. The rating agency does however; signal the challenges that the company may have to contend with in the event that the GFA expires. 

“Eskom welcomes Fitch’s decision to affirm our credit rating at ‘BBB-‘. We view Fitch’s and Moody’s (published earlier this week) rating affirmations as an indication of the positive financial and operational results achieved by the business. We are acutely aware of the concerns raised by the rating agency and continue to engage with the relevant stakeholders to expediently resolve these issues”, said Anoj Singh, Chief Financial Officer. 

Issued by Eskom Media Desk, 8 December 2016