Moody’s Investors Service, has placed all global scale ratings assigned to eight South African corporates under review for downgrade.<\/p>\n
The decision was made after\u00a0the weakening of the South African government’s credit profile, as captured by Moody’s decision to place the sovereign ratings under review for downgrade on 24 November 2017, the agency said in a statement on Wednesday<\/p>\n
Moody’s placed the global scale ratings under review from negative of:<\/p>\n
In addition, Moody’s said it has taken no action on the following corporate issuers:<\/p>\n
“Ratings at these entities carry some potential exposure to South Africa risk because of their legal domicile,” said Moody’s.<\/p>\n
“However AngloGold Ashanti Limited, Gold Fields Limited, Naspers<\/strong> Limited and Steinhoff International Holdings N.V. have significant diversification outside South Africa so have the potential to be rated at least one notch above the South African sovereign. We see MTN Group Limited<\/strong> as having less potential to be rated higher than South Africa, but it was downgraded on 13 June 2017 so its rating is currently positioned below South Africa.”<\/p>\n In addressing why Telkom was placed under review, Moody’s said that the company’s\u00a0100% operational concentration in South Africa and 39.3% government ownership, exposed it to the heightened risks associated with the operating environment in South Africa.<\/p>\n “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,” said Moody’s.<\/p>\n “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.”<\/p>\n
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