Johannesburg - International ratings agency Standard and Poor’s (S&P) on Tuesday affirmed its rating for the South African government’s freight transport and logistics company Transnet’s long-term foreign currency and confirmed the company’s resilience and attractiveness as an investment of choice.
The ratings agency said while the macro-economic outlook remained negative, Transnet continued to perform despite a subdued and challenging economic environment.
In a statement late Tuesday, S&P said it was optimistic that Transnet’s financial credit metrics would remain in line with the ratings agency’s assessment of the company’s stand-alone credit profile at bbb+ even in a challenging economic environment.
Transnet is currently executing its R380 billion rolling 10-year infrastructure investment programme.
The ratings agency said it believed that Transnet would continue to execute its infrastructure investment programme in a prudent manner, taking into account market variations.
Transnet spokesperson, Molatwane Likhethe, said S&P’s affirmation and acknowledgement of the critical role that Transnet played in South Africa’s economy as a provider of essential infrastructure was testament to the company’s agility and innovation in navigating tough economic conditions.
“Encouragingly, the ratings agency said Transnet’s rail, ports and pipeline businesses pose relatively low risk compared with its counterparts in Europe, the Middle-East and North Africa,” Likhethe said.
S&P said Transnet’s sharp risk management framework, sound relationships with financial institutions and ability to tap into unused credit facilities would enable the company to meet its commitments.
“Transnet has a stand-alone investment grade and raises funds on the strength of its balance sheet and receives no funding or guarantees from the fiscus,” Likhethe said.
Earlier this month, S&P affirmed South Africa’s long and short-term foreign and local currency bond ratings at one notch above sub-investment grade and the domestic currency bond rating three notches above.
ANA