Pretoria – Moody’s Investor Services has affirmed Eskom’s credit rating, assigning it to a national scale rating of A2.za.
“Moody’s has today affirmed Eskom’s Ba1 senior unsecured and senior unsecured medium term notes’ ratings. The rating agency has simultaneously assigned to Eskom a national scale rating of A2.za,” said Eskom in a statement on Monday.
The outlook on both the ratings is negative.
Eskom’s Chief Financial Officer Anoj Singh said the entity is encouraged by Moody’s decision.
“We are encouraged by Moody’s decision to affirm Eskom’s credit ratings. We view this action as evidence that we have made major strides in ensuring a secure electricity supply and in improving the company’s financial profile, thereby enabling us to continue with timeously executing the required funding for the completion of the current build programme,” said Singh.
In its statement, the rating agency cited the power utility’s continued successful access to funding with the support of the R350 billion Guarantee Framework Agreement (GFA) provided by government, and the company’s stabilised operational performance as the rationale for their affirmation.
Due to improved operational performance, Eskom has not implemented load-shedding since August 2015.
In September 2016, Moody’s placed Eskom on review for downgrade. That, however, has been revised to a negative outlook, indicating the potential for the company’s outlook to be revised to stable in the event that government approves Eskom’s request to extend the utilisation period of the GFA currently scheduled to expire on 31 March 2017. This process is currently underway, said the power utility.