Moody’s downgrades Land Bank

Moody’s Investors Service said it downgraded Land and Agricultural Development Bank’s corporate family rating and long-term issuer ratings to B3 from B1, and its national scale issuer ratings to Ba2.za/NP.za from Baa2.za/P-2.za.

The agency changed the outlook on the issuer to negative from ratings under review. This rating action concludes the review for downgrade started on April 24, the agency said.

The downgrades reflect the combination of more protracted delays in fixing the default triggered by the bank’s failure to make payments when due to its lenders, combined with Moody’s expectations that actual economic losses to creditors will be low, the agency said.

The Land Bank and the government of South Africa, as the sole shareholder, appear to be committed to reaching a viable restructuring and recapitalization plan, Moody’s said.

“The negative outlook reflects the high implementation risks of the restructuring plan that may lead to further delays and higher creditor losses than currently imputed in the ratings,” the agency said in a press release.

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