Eskom’s credit rating was cut to the fifth tier of junk status by Moody’s on Wednesday night. Moody’s downgraded Eskom to B2 from B1, which is equivalent to B in S&P Global Ratings’ and Fitch’s nomenclature. S&P cut Eskom to its seventh tier of junk, CCC+ in February while Fitch rates Eskom BB-, making it the most optimistic of the big three ratings agencies about the power utility’s credit-worthiness. Moody’s said despite the efforts by President Cyril Ramaphosa to bolster Eskom by appointing a new board, it was concerned about "the lack of any tangible financial support for the company in the February state budget". The ratings agency said it was concerned that Eskom’s R367bn debt burden reported in its six months to end-September results "could grow to potentially unsustainable levels". Eskom needs to borrow about R72bn in the current financial year; which includes repaying a R20bn "club loan concluded under the government guarantee". Moody’s said that "given a new board with muc...

BL Premium

This article is reserved for our subscribers.

A subscription helps you enjoy the best of our business content every day along with benefits such as exclusive Financial Times articles, ProfileData financial data, and digital access to the Sunday Times and Sunday Times Daily.

Already subscribed? Simply sign in below.



Questions or problems? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now