Fitch affirms Eskom

Fitch Ratings said it affirmed Eskom Holdings Ltd.'s international long-term local currency rating at A and national long-term rating at AAA.

The outlook remains stable.

Fitch said the rating factors in the South African government's 100% ownership. Although the state does not explicitly guarantee Eskom's outstanding debt, Fitch said the rating takes into account implicit government support given the strategic importance of the utility to the economy.

The rating also is supported by Eskom's strong financial profile, reflected in fiscal year 2005, which spans a 15-month period, operating margins of 21% in fiscal year 2003, positive free cash flows and low leverage. Fitch said it is satisfied on the basis of current performance that the increase in leverage due to a capital expenditure program to commence shortly is not likely to result in a deterioration in credit quality beyond the existing rating level.

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