S&P: Rand Water view negative

Standard & Poor's said it revised the outlook on the local- and foreign-currency ratings on Rand Water to negative from stable and affirmed the BBB+ foreign-currency, A+ local-currency and zaAAA national scale ratings.

The action reflects the change in the outlook on the Republic of South Africa (foreign-currency BBB+/negative/A-2; local-currency A+/negative/A-1), according to the agency.

Ratings reflect the company's monopoly position as the bulk water distributor to the Gauteng region, the agency said.

Rand Water's strong business profile also is supported by a strong operational track record and supportive regulatory framework, S&P said.

Factors offsetting the strengths include customer concentration, risk of nonpayment of services by smaller municipalities, exposure to drought conditions and some uncertainty regarding the future regulatory framework, the agency noted.

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