Fitch downgrades Eskom to BBB

Fitch Ratings said it downgraded Eskom Holdings SOC Ltd.'s long-term local currency issuer default rating to BBB from BBB+.

The outlook is stable.

Fitch said the action reflects the downgrade of South Africa's long-term local currency issuer default rating to BBB from BBB+ and long-term foreign currency issuer default rating to BBB- from BBB.

The agency continues to assess the links between Eskom and the government of South Africa (BBB-/BBB/stable) as strong, evidenced by the Guarantee Framework Agreement (GFA) and most recently by the equity conversion of the government's subordinated loan to Eskom. Fitch's expectation of additional equity contributions in fiscal year 2016 also supports the alignment of Eskom's issuer default rating with that of the sovereign.

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