Fitch Ratings has upgraded Eskom’s national long-term ratings to AAA(zaf), the power utility said on Thursday.
Chief executive Brian Dames welcomed the improvement in the ratings, from AA+(zaf).
“The positive rating action is very helpful at this critical time as Eskom continues to execute the current build programme,” he said in a statement.
AAA is the highest rating denoting the best quality companies, which are considered reliable and stable. AA denotes a quality company, with slightly higher associated risk than AAA companies.
“A positive rating adjustment will assist Eskom in accessing funding in capital markets and it will improve investor confidence.”
Fitch affirmed that Eskom’s outlook remained stable. In a statement on Wednesday, Fitch analyst Yeshvir Singh said the upgrade reflected a recalibration of the higher end of South Africa’s national rating scale.
“Eskom’s ratings are aligned with the sovereign ratings and continue to reflect its strong links with the state, including direct government guarantees for a large part of the company’s debt.”
The recalibration followed Fitch’s downgrade of South Africa’s long term foreign and local currency issuer default ratings at BBB, from BBB+, and BBB+, from A, respectively.