Moody's affirms Eskom ratings

Global ratings agency Moody’s Ratings has affirmed Eskom’s B2/Ba2 credit ratings with a stable outlook.

This comes just a week after Fitch, the credit rating agency, also affirmed the power utility’s Local-Currency Issuer Default rating at ‘B’ with a stable outlook.

“Moody’s Ratings…affirmed Eskom’s B2 long-term corporate family rating, B2-PD probability of default rating, B2 senior unsecured notes ratings, (P)B2 rating on the global medium-term notes programme, caa1 baseline credit assessment and Baa3.za national scale corporate family rating. 

“Moody’s also affirmed the Ba2 backed senior unsecured ratings on notes that benefit from an unconditional and irrevocable government guarantee,” Eskom said. 

Eskom’s Group Chief Executive, Dan Marokane, said the power utility remains focused on delivering on its turnaround plan to “restore Eskom’s operational and financial stability”.

“Earlier this month, Eskom reached the milestone of one year without loadshedding that advances the stability of the grid and energy security in South Africa, as well as market liberalisation and the integration of renewable energy to provide a platform for the South African and Sub-Saharan Africa economy to grow from,” he noted.

The power utility explained that Moody’s affirmation is attributed to improved operational performance, “strengthened cash flow generation and liquidity position, supported by government debt relief measures”. 

“The rating agency has also noted what they consider to be ongoing constraints, including rising municipal debt arrears, regulatory challenges associated with tariffs, significant capital expenditure requirements and execution risks associated with the ongoing unbundling process,” Eskom said. – SAnews.gov.za