Moody’s lowers Eskom, bonds to B1

Moody's Investors Service said it downgraded Eskom Holdings SOC Ltd.’s long-term corporate family rating to B1 from Ba3 and the zero coupon eurobonds to B1 from Ba3.

Concurrently, the agency downgraded the global medium-term note program and the senior unsecured global medium-term notes of Eskom to provisional B2/B2 from provisional B1/B1.

The probability of default rating was also downgraded to B1-PD from Ba3-PD and the national scale rating long-term corporate family rating to Baa2.za from A3.za.

All ratings remain under review for further downgrade.

Moody’s said the action reflects the deterioration in Eskom's financial and liquidity position with no prospect of a near-term equity injection by the government to shore up its weak financial profile.

“At the same time, the pressure on credit quality is mitigated by the strong likelihood that the steps announced on 20 January 2018 by Deputy President Ramaphosa, including replacing the Eskom Board, together with the support of the National Treasury, will allow the company to secure sufficient funding to address a looming liquidity crisis,” the agency explained in a news release.

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