Fitch Ratings has upgraded Eskom’s national long-term ratings to AAA(zaf), the power utility said on Thursday.<\/p>\n
Chief executive Brian Dames welcomed the improvement in the ratings, from AA+(zaf).<\/p>\n
“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.<\/p>\n
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.<\/p>\n
“A positive rating adjustment will assist Eskom in accessing funding in capital markets and it will improve investor confidence.”<\/p>\n
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.<\/p>\n
“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.”<\/p>\n
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.<\/p>\n
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