Moody’s Places S. Africa Firms on Review for Downgrade
Moody’s Places S. Africa Firms on Review for Downgrade

Moody’s Places S. Africa Firms on Review for Downgrade

Moody’s Places S. Africa Firms on Review for Downgrade

Moody’s Investors Service has on Wednesday placed all the global scale ratings assigned to eight South African corporates under review for downgrade.
Today’s rating actions on the eight South African corporates follow the weakening of the South African government’s credit profile, as captured by Moody’s decision to place the sovereign ratings under review for downgrade on November 24, IOL.co. reported.
Ratings at these entities carry some potential exposure to South Africa risk because of their legal domicile. However AngloGold Ashanti Limited, Gold Fields Limited, Naspers Limited and Steinhoff International Holdings N.V. have significant diversification outside South Africa so have the potential to be rated at least one notch above the South African sovereign.
“We see MTN Group Limited as having less potential to be rated higher than South Africa, but it was downgraded on June 13, so its rating is currently positioned below South Africa.
The placement of the ratings under review for downgrade reflects the credit linkages of these corporates with the South African economy and their material exposure to the domestic operating environment.
Rating under review reflects the uncertainty surrounding political developments and the potential weakening of the country’s institutional, economic and fiscal strength that has translated into depressed consumer and business confidence which flows through to lower growth prospects for these corporates.
The rating agency expects GDP growth of only 0.5% in 2017 and 1.2% in 2018 from 0.3% in 2016, levels significantly below the government’s target growth.
The review will assess the credit implications and potential vulnerabilities in the context of a currently challenging operating environment on each of the issuer’s ratings. The impact on all the national scale ratings will also be assessed in the event the government of South Africa’s Baa3 local currency bond being downgraded to Ba1.
Moody’s said it had also had placed the global scale long-term ratings of 12 South African regional and local governments and three government-related entities under review for downgrade.
City of Cape Town’s, City of Ekurhuleni’s and City of Johannesburg’s global scale short-term issuer ratings of Prime-3, were also placed on review for downgrade. The long term and short term national scale ratings are not affected by this action.
“Today’s rating actions follow the potential weakening of the South African government’s credit profile, as captured by Moody’s recent decision to place South Africa’s Baa3 government bond ratings on review for downgrade.”

Short URL : https://goo.gl/jmZpgs
  1. https://goo.gl/6Ay9Hb
  • https://goo.gl/nTGhHn
  • https://goo.gl/eynq86
  • https://goo.gl/26mAzZ
  • https://goo.gl/upabm5

You can also read ...

Big Data, Online Markets Can Lead to Higher Prices
Information technology is not just transforming markets; it is...
Italy could set the stage for the bloc’s next crisis if it delivers on its tax-cutting and high-spending policies.
Capital investment in 24 of the EU’s 28 member states has...
Air India Sale Hangs in Balance
Uncertainty hangs over the Indian government's plans to sell...
Liu He (L) and Steven Mnuchin after the joint statement to avoid a trade war.
With "minutes to midnight", the great US-China trade war...
Bangla Trade Deficit Doubles
Bangladesh’s trade deficit has almost doubled within 12 months...
A meeting of eurozone finance ministers is set for June 21.
Greece’s creditors have agreed a program of reforms as the...
Cumulative gross financing needs could amount  to $69.3 billion for 2018 for the six-nation group.
While public debt levels remain at manageable levels for most...
Egypt Gets Bids for Power Plant
Egypt next week will announce the winning consortium to build...

Add new comment

Read our comment policy before posting your viewpoints