Fitch downgrades Eskom’s ratings to align to the sovereign ratings
11 April 2017
Fitch Ratings has downgraded Eskom’s Long-term local currency Issuer Default Rating (IDR) and the Senior unsecured local currency rating to ‘BB+’ from ‘BBB-’. The ratings agency has also affirmed Eskom’s National long-term and short-term ratings at ‘AAA’ and ‘F1+’, respectively. The outlook is stable.
In terms of Fitch’s rating methodology for ‘Parent and Subsidiary Rating Linkage’ criteria; Eskom’s rating downgrade follows the agency’s decision to downgrade South Africa’s Long-Term Foreign- and Local-Currency Issuer Default Ratings (IDRs) to 'BB+' from 'BBB’ announced on Friday, 07 April 2017.
Given Eskom’s significant link and support from the South African government and the company’s high sensitivity to changes in the sovereign credit profile, Eskom’s downgrade reflects the downgrading of South Africa’s rating.
Anoj Singh, Eskom’s Chief Financial Officer said: “We note the decision by Fitch to downgrade Eskom’s credit ratings as largely driven by the downgrade of the sovereign credit rating. We also note Fitch’s revision of Eskom’s outlook to ‘Stable’ from ‘Negative’ and remain resolute in responsibly executing Eskom’s funding plan for the completion of the current build programme and ensuring continued security of supply for the country.”
Issued by Eskom Media Desk, 11 April 2017