FOOTNOTES
HILARY JOFFE: Eskom rated all the way down, but firms with offshore exposure fare better
Friday night’s downgrade by Moody’s of SA’s sovereign-credit rating has been followed by a stream of rating actions on all of the other entities that the agency rates in SA – from public sector entities such as state-owned companies or cities to private-sector firms that include banks, insurers and other companies. Anyone wanting to raise debt in the markets needs a rating, and, just as it does for a country, the rating influences the cost at which a company can fund itself. So ratings actions matter. And there are striking trends that emerge from the latest round. One is just how bad Eskom’s financial state is, in the eyes of the credit analysts. It was already well into junk territory, but has been given a double-notch downgrade by Moody’s, to Ba2/Ba3 (depending on which instruments are being rated) – despite the support it has from government. By contrast, Transnet, with its strong cash flows, has simply been downgraded in line with the sovereign, to Baa3 – which is still investm...
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