Moody's has placed all global scale ratings assigned to several South African corporates, including two SOEs, under review for downgrade
Moody’s placed the global scale ratings under review from negative of the following companies: Barloworld Ltd, Fortress REIT Ltd, Hyprop Investments Ltd, Imperial Group Ltd, Redefine Properties Ltd, Telkom SA SOC Ltd, The Bidvest Group Ltd, and Transnet SOC Ltd.
The agency said it had placed Telkom under review because the company’s 100% operational concentration in South Africa and 39.3% government ownership exposed it to the high risks associated with SA’s operating environment.
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Moody’s said in a statement:
“Telkom’s credit profile continues to balance execution risk around its transformation process of its business model and the low leverage and overall strong credit metrics for the rating category. This offsets to some degree Telkom’s operating and competitive challenges in South Africa, as well as the larger capital investments required to deliver on its key strategies for the upcoming years.”
Moody’s statement with the news followed the recent weakening of the South African government’s credit profile, as captured by the ratings agency’s decision to place the sovereign ratings under review for downgrade on 24 November 2017.
