S&P affirms Eqstra

Standard & Poor's said it affirmed the zaBBB/zaA-2 long- and short-term South Africa national scale ratings on Eqstra Holdings Ltd.

The affirmation factors in a ZAR 650 million capital increase for the company in the first half of 2010, alleviating near-term funding and liquidity vulnerabilities, although longer term sustainable improvements in Eqstra's funding profile, profitability and cash flow would be more positive for the ratings, S&P said.

The ratings continue to be supported by good levels of capitalization - albeit with high leverage - and a good market position and customer franchise, the agency said.

The ratings are constrained by a still-concentrated funding profile, which is reliant on the limited number of South African bank counterparties, cyclical earnings vulnerabilities and adequate cash flow, S&P said.

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