BLOOMIN’ MARVELLOUS Eskom will get funding ‘in time’
R72BN SECURED BY MONTH-END
But debt costs are higher following rating agencies’ downgrade.
Eskom is confident about its current funding status, although the cost of debt would increase following S&P Global and Moody’s rating agencies decisions to lower the power supplier’s credit rating and put it on review.
Eskom chief financial officer Anoj Singh said that 72% of Eskom’s current fiscal year’s funding amounting to R72 billion would be secured by the end of the month.
Singh said the funding requirement for the financial year 2017-18 was therefore not compromised and was in line with the execution of the power utility’s funding plan.
“We are confident that we will successfully execute the funding plan over the next five years, backed by the availability of the government guarantees. The only challenge that Eskom will have to contend with will be the higher cost of debt,” Singh said.
Singh’s comments follow S&P Global Ratings announcement lowering Eskom’s long-term corporate credit rating to B+ from BB- following the ratings action to downgrade SA’s long-term foreign currency rating credit to junk status.
Moody’s Investor Services yesterday also announced its decision to place Eskom’s Ba1 senior unsecured medium term note rating on review for a downgrade.
The rating agency has simultaneously placed Eskom’s global scale corporate family rating and its national scale rating on review for downgrade.
Moody’s review decision on Eskom also follows the rating agency’s decision to place the sovereign’s Baa2 bond rating on review for downgrade.– ANA