S&P Global puts Eskom deeper into junk
A negative outlook suggests it could be headed for ‘default imminent, little prospect for recovery’
Eskom has had its credit rating cut by S&P Global Ratings into the first tier of the C-band, lowering its junk status from "highly speculative" to "substantial risks". Under S&P’s and Fitch’s nomenclature, the only ratings worse than those that start with C are D ratings — given to corporations that have defaulted on debt repayments. S&P said in a note e-mailed on Wednesday morning it was downgrading Eskom to CCC+ from B-because of "ongoing liquidity concerns and insufficient government support". The ratings agency maintained a negative outlook, meaning Eskom may be heading towards a "default imminent with little prospect for recovery" rating if it falls below CCC. "Eskom remains at risk of facing a distressed exchange situation or default in the next six months despite securing R30bn in short-term funding from local and international funders so far this year," S&P said. "The negative outlook points to uncertainty regarding the extent and timeliness of government support for Eskom o...
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