The effects of the Cabinet Reshuffle resulted in the recent local and foreign currency downgrade by Moody’s, to BAA3. But Moody’s has taken it a step further…
On Tuesday, Eskom was downgraded from Ba1 to Ba2, the same day that chairman Ben Ngubane resigned. This was after the credit ratings downgrade of South Africa’s top five banks which took place on Monday. Additionally, “three development finance institutions, certain City Power and Sanral credit ratings, and 10 regional and local governments were downgraded” says fin24. Sasol and MTN are amongst the companies affected.
Moody’s commented on this decision saying that if it were not for government’s “R350bn guarantee framework agreement with Eskom”, they would have rated Eskom as b3, Business Live reports.
Eskom’s chief financial officer Anoj Singh said in a statement: “Eskom has secured 53% of this fiscal year’s funding requirement and we remain resolute that we will fully execute the required funding for the year, albeit under challenging market conditions.”