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Johannesburg - Ratings agencies have agreed to withhold a new rating for electricity supplier Eskom until the parastatal has clarity about its funding model.
"Despite the earlier downgrade, ratings agencies are withholding [an updated] rating until the funding solution is finalised," said CEO Jacob Maroga at the presentation of Eskom's results on Thursday.
Maroga said "discussions with the agencies" have brought about this agreement, until the government gave clarity on how to finance Eskom's R80bn deficit for its infrastructure investment programme.
The SA government has already offered Eskom a R60bn equity loan over the next two years and R177bn in guarantees.
Ratings agencies recently came under a lot of criticism when they continued recommending investment grade ratings to troubled US and UK banks, even while they were collapsing under the weight of the subprime mortgage securitisation crisis.
"It would be unlikely that ratings agencies compromise their independence and integrity by being influenced by companies," Brait economist Colen Garrow told Fin24.com. He said Eskom's increased debt would have comprised investor sentiment over its bonds.
Garrow said he finds it unusual for ratings agencies to be asked to withhold their assessment. "My guess is that they would scrutinise the company even more [if a funding model has not been finalised]," said Garrow.
Both Garrow and Nedbank economist Dennis Dykes agreed a major issue with ratings agencies is that the companies being rated pay for the service.
"Companies go for ratings because they need to raise money in the markets," said Dykes. "Ratings agencies have indeed lost a great deal of credibility."
However, Dykes said it makes sense to withhold ratings due to the uncertainty about the funding model, which Eskom said would be finalised in the next three months. "If the government doesn't guarantee it, Eskom's rating becomes more obscure," said Dykes.
Eskom's present ratings would not necessarily deteriorate because of the R9.7bn net loss it announced, as the agencies would have had insight into these results during their previous assessment rounds.
- Fin24.com