Fitch downgrades Eskom
Johannesburg - Ratings agency Fitch has recalibrated Eskom’s rating down to a notch above junk, bringing it inline with SA’s long-term local currency debt rating.
In a statement issued on the Stock Exchange News Service on Friday, the power utility says Fitch also affirmed its national long- and short-term ratings and marked its outlook as stable.
The utility notes, given its strong link and support from the South African government and its high sensitivity to changes in the sovereign credit profile, Eskom’s downgrade reflects the downgrading of South Africa’s rating.
The downgrade follow’s Fitch’s recent rerating of SA’s local currency debt, which it dropped to a notch above junk. This move increased fears that the country could be rated as junk come December when rating agencies will again review the country’s sovereign debt standing.
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Eskom notes “it is important to note that the revision of the rating was not because of any fundamental changes on the sovereign credit”.
CFO Anoj Singh says “we note the decision by Fitch to downgrade Eskom on the back of the Sovereign downgrade; in the interests of the economy we will continue to focus on stabilising the security of supply without compromising Eskom’s financial sustainability.”IOL