Fin24

Fitch downgrades Eskom‚ Transnet

2013-01-11 19:40

Cape Town  - Credit rating agency Fitch made adjustments on Friday to the ratings and outlooks of the country’s two most significant state-owned enterprises, Eskom and Transnet.

It has downgraded Eskom and Transnet after cutting the country's sovereign debt, citing deteriorating economic growth that risks social and political tensions.

Fitch said Eskom and Transnet's ratings remain linked to those of the country's sovereign debt.

It lowered its outlook on Eskom's long-term local currency IDR to 'BBB+' from 'A' with a stable outlook. It also dropped its senior unsecured local currency to 'BBB+' from 'A'.

Along with other cuts, Transnet's long-term local currency IDR was downgraded to 'BBB-' from 'BBB+' with a stable outlook, while its local currency senior unsecured rating also fell to to 'BBB-' from 'BBB+'.

"Fitch's assessment of these issuers' legal‚ operational and strategic ties with the state in accordance with the agency's 'Parent and Subsidiary Rating Linkage' criteria‚ and the agency's assessment of the critical role of these issuers in the South African economy", the agency said in a statement.

The rating actions follow the downgrade of the country from BBB+ (negative) to BBB (stable). The long-term local rating was downgraded by two notches from A to BBB+. 

"The South African government is consistently making efforts to address the concerns identified in Fitch's rating review which is aimed at mitigating growth and socio-economic concerns," the Treasury said in a statement responding to the country's downgrade on Thursday.

The Treasury said the downgrade had its roots in economic troubles facing the Eurozone, one of South Africa's major trading partners.

Rating agencies Standard and Poor's (S&P) and Moody's have already downgraded several large companies, including parastatals Eskom and Transnet last year.

"Although Eskom's credit rating remains investment grade, with the support of government, the recent downgrades by Moody's and Standard & Poor's are a concern", Eskom said at the time.


Comments
  • calvin.eighteeseex - 2013-01-11 20:26

    Yah neh, one stove,one kettle,one iron one fridge one tv one radio one dstv decoder,4light bulbs NO geezer or air con (poor mans house) but I must dish out R150/week to you Eishkom, 3years ago for the same appliances I was paying R20/MONTH now it has gone up by more then 200% as for Transnet their employment criteria suck, so well done to the downgraders for job well done to these 2parasites

      Bob - 2013-01-12 08:43

      Those 2 parasites couldn't care less since they'll just pass the higher credit costs to consumers.

  • MJS1234 - 2013-01-11 20:51

    Where are our leaders??? All we get is Cyril saying Zuma is an "action man" but not ONE word on the mines closing, or the Cape farms buring! We need proactive leaders, URGENTLY!!!

      lacrimose.wolf - 2013-01-11 21:04

      The reality is, there aren't any. They write policies, processes and procedures then say "hey we've done our job, you're on your own. The law must take its course. Justice must be seen to prevail" etc. They all disappear when the problems arise and hide behind these cute soundbites. The only way you get ANC govt to DO anything in the last 3 years, is take them to court (and we pay TWICE for that 'privilege'). Then they simply ignore the court orders handed down and carry on as before. There seem to be enough people around to invite them back for 5 more years of the same, though. So perhaps this is what people understand by leadership?

      trevor.bush.9655 - 2013-01-12 05:52

      @Clavin, stop being a Chop and get your head out of your rear.The strikes on the farms is instigated by COSATU, the bed partner of the ANC, why do you think the ANC has not said a word, why would it when it has interests in this strike. Go to the farming community of Robertson, Montagu...etc and see for yourself before you make brainwashed comments, no doubt you voted ANC with both hands open,ears and eyes closed.

  • gregkawere - 2013-01-11 21:26

    these rating agencies are a pack of clowns when Africa sneezes they downgrade us ever so readily, but when Europe coughs noting happens, how much debt does America have

  • lvmashamba - 2013-01-11 21:55

    May some1 asist betwen eskom en transnet which 1 is makin more profit

      andrew.crawford.50 - 2013-01-12 10:51

      They should not have the prime objective of making profit. They are public-service corporations, for the well being of the citizens of a country. Any excess profits they make are a form of taxation. They must make a "surplus" which must then be allocated to a Capital Replacement Fund for replacing old infrastructure and upgrading systems.

  • Thobile Lugwadu - 2013-01-12 08:15

    Whats the rating for GM,CHRYSLER,TELEFUNKEN, USA,GREECE,SPAIN,PORTUGAL,YEMEN,EGYPT,SAUDI ARABIA,TURKEY,COLOMBIA?

  • winifred.watson.9 - 2013-01-12 09:47

    The problem with state enterprises they do not work on a budget, they are top heavy with too many chiefs all earning big money and doing nothing constructive. Once the learn to cut the fat, work within a budget forget about parties and actually do a decent days work, things will progress. Life is not one big party. Eskom is always out with the begging bowl and now it has to stop. Look at SAA same thing, one would really think state owned enterprised would be very tight fisted but the money flows like a burst water pipe on all the wrong things.

  • Eterni80 - 2013-01-12 18:14

    Fitch downgrade is symptomatic of the fact that SA has cANCer pity we can't downgrade them..

  • peter.jordaan.5 - 2013-01-12 20:14

    Yay another trophy for the ANC and the 101 centenary celebrations. Only few more to junk status. What fantastic leadership, direction and achievement. Outstanding. Another few years and you would have completely distroyed the country. Zuma you must be a proud man. Vote for Zuma to guarantee you lose everything, off to junk we go. Whooppee!!!!

  • john.cryink - 2013-01-12 20:23

    The cANCer is said to be a movement they and their state enterprises are moving this country towards a cliff and no more moving only falling

  • Blixum - 2013-01-12 21:34

    SA slowly slipping into African standards.

  • danny.levin.33 - 2013-01-13 08:14

    The "transformation" continues....

  • sipho.mathabula - 2013-01-13 10:28

    This government is running this country into the ground, our credit rating drops the rand weakens and petrol prices go up and then everything else follows. Then again the economy weakens and again the whole vicious cycle starts again.

  • walter.corbett.54 - 2013-01-13 11:38

    It does, however leave more money for the NDP (Nkandla Development Plan) where many more upgrades will be done. See how the Nkandla King finances it in this short animation of 1 min - hehe. http://www.youtube.com/watch?v=-cWSa5267U0&feature=player_detailpage

  • pages:
  • 1