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Moody's cuts Eskom, Telkom ratings

Oct 02 2012 07:38
Reuters

(Picture: Supplied)

Company Data

TELKOM SA SOC LIMITED [JSE:TKG]

Last traded 67
Change 0
% Change 0
Cumulative volume 1953105
Market cap 0

Last Updated: 01/01/0001 at 12:00. Prices are delayed by 15 minutes. Source: McGregor BFA

GOLD FIELDS LIMITED [JSE:GFI]

Last traded 55
Change 3
% Change 5
Cumulative volume 3776225
Market cap 0

Last Updated: 01/01/0001 at 12:00. Prices are delayed by 15 minutes. Source: McGregor BFA

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Johannesburg - Credit agency Moody's on Monday cut its rating for power utility Eskom, fixed-line operator Telkom [JSE:TKG] and 12 municipalities, following a similar downgrade of Africa's top economy last week.

It also lowered its outlook on miner Gold Fields [JSE:GFI] to "stable" from "positive", citing concern about the impact of labour unrest on South Africa's mining industry.

The agency said in a statement it cut Eskom's senior unsecured bond rating by one notch, to Baa3 from Baa2, a move that could drive up borrowing costs for the utility as it looks to fund infrastructure spending.

The state-owned utility is expected to tap the bond market for some of a planned R300bn in funding.

Moody's made a similar cut to Telkom's rating, which was also lowered to Baa3, while 12 local governments had their long-term ratings cut.

The agency on Thursday cut the government bond rating of Africa's top economy by one notch, citing worries about the negative investment climate - from creaking infrastructure to concerns about future political stability.

Investor sentiment has been soured by a series of wildcat strikes in the mining industry in recent weeks, which have hamstrung production in the world's top platinum producer and No.4 gold producer.

Critics have also charged that the strikes have exposed President Jacob Zuma's ANC as ineffectual and out of touch with millions of poor South Africans.


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moody's  |  eskom  |  telkom  |  sa economy

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