Pretoria: Eskom says it has taken note of the downgrade of its credit rating by Moody’s Investors Service.
On Monday, Moody’s downgraded its rating of Eskom’s bonds by one notch, following the rating agency’s revision of the South African Sovereign bond rating last Thursday.
On Moody’s scale, Eskom’s senior unsecured bond rating has been reduced to Baa3 from Baa2.
In its rationale for the downgrade, Moody’s said the weakening of the South African government’s credit profile directly affected the rating of the power parastatal.
Meanwhile, Standard & Poor’s on Wednesday issued an update on Eskom but affirmed its rating of BBB+.
“We have taken note of the rating agencies’ analysis of the challenges facing Eskom. Their comments highlight the electricity industry’s need for regulatory and policy certainty, as well as the need for Eskom to be financially sustainable,” said Eskom Chief Executive Brian Dames.
Eskom is in the middle of a R340 billion new build programme to provide electricity infrastructure that is urgently needed to support South Africa’s economic growth and development.
“Eskom has a funding programme in place for the new build programme, with government support, and already has more than R180 billion of debt on its balance sheet, from local and international financial markets. This will almost double over the next six years as the new build programme is completed. Credit ratings by Moody’s and Standard & Poor’s influence the cost and availability of Eskom’s debt,” said Eskom.