Moody’s places Eskom on review for downgrade
by Staff Writer,
2016-03-11 17:27:40.0
MOODY’S Investors Service (Moody’s) on Friday placed the Ba1 senior unsecured and the (P)Ba1 senior unsecured medium-term note ratings of Eskom on review for downgrade, the ratings agency said on Friday.
The rating action was driven by the weakening of the government’s credit profile, as captured by Moody’s review for downgrade of SA’s Baa2 bond and issuer ratings initiated on March 8 2016, the agency said.
The Moody’s estimate of a high-level of government support in the event of financial distress was underpinned by Eskom’s strategic importance to the government’s social and economic policy, as the country’s dominant electricity supplier, the agency said.
Moody’s expectation of government support being provided in the event of need was evidenced by direct financial support in the form of a R350bn guarantee framework agreement, a R60bn shareholder loan that was converted into equity in 2015, and a planned R23bn equity injection, of which R18bn had already been provided, Moody’s said.
Eskom Medupi power station.
MOODY’S Investors Service (Moody’s) on Friday placed the Ba1 senior unsecured and the (P)Ba1 senior unsecured medium-term note ratings of Eskom on review for downgrade, the ratings agency said on Friday.
The rating action was driven by the weakening of the government’s credit profile, as captured by Moody’s review for downgrade of SA’s Baa2 bond and issuer ratings initiated on March 8 2016, the agency said.
The Moody’s estimate of a high-level of government support in the event of financial distress was underpinned by Eskom’s strategic importance to the government’s social and economic policy, as the country’s dominant electricity supplier, the agency said.
Moody’s expectation of government support being provided in the event of need was evidenced by direct financial support in the form of a R350bn guarantee framework agreement, a R60bn shareholder loan that was converted into equity in 2015, and a planned R23bn equity injection, of which R18bn had already been provided, Moody’s said.
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