S&P upgrades Exxaro Resources

S&P said it raised its South Africa national scale ratings on Exxaro Resources Ltd. to zaA from zaA-.

“Exxaro's debt metrics over the coming three years should stay supportive of its current credit quality. We forecast debt to EBITDA and funds from operations (FFO) to debt will remain between 1x-2x and 50%-60%, respectively, on average. Long-term take-or-pay contracts with Eskom give pricing visibility, while strong export spot prices (about 20% of production) are likely to boost Exxaro's margins over the short term,” S&P said in a press release.

The agency noted Exxaro recently refinanced its bank facility, extending maturities by five years and strengthening its liquidity position.

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