Moody’s downgrades DBSA, IDC

Moody’s Investors Service said it downgraded the corporate family ratings and long-term foreign-currency issuer ratings of the Development Bank of Southern Africa and the Industrial Development Corp. of South Africa to Ba2 from Ba1.

At the same time, the agency downgraded their long-term national scale issuer ratings to Aa3.za from Aa1.za.

“Today’s rating actions reflect Moody’s assessment that rising fiscal pressures, combined with a financially weak state-owned enterprise (SOE) sector, suggest that the South African government may not always be in a position to provide timely and adequate support to DBSA and IDC, in case of need. As a result, Moody’s has lowered its support assumptions to strong from high, and limited its government support uplift to one notch, from two previously,” the agency said in a press release.

The outlook on both issuers remains negative.

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