Re­vised rat­ings outlook by S&P

The Star Late Edition - - COMPANIES -

S&P GLOBAL Rat­ings has re­vised the outlook for African Bank from “Neg­a­tive” to “Sta­ble” and af­firmed the B+/B global scale rat­ing. The na­tional scale rat­ing was raised to zaBB from zaBB-. S&P said the bank’s cap­i­tal­i­sa­tion has im­proved, com­bined with bet­ter earn­ings than ex­pected. “The sta­ble outlook bal­ances the bank’s very strong cap­i­tal lev­els and lim­ited medium-term re­fi­nanc­ing risks against the weak eco­nomic en­vi­ron­ment that could neg­a­tively im­pact its earn­ings and busi­ness sta­bil­ity, and the longer term risk that the bank’s fund­ing is sus­cep­ti­ble to in­vestor con­fi­dence,” S&P said. The main driver in the sig­nif­i­cant re­duc­tion in the bal­ance sheet has been the sys­tem­atic re­pur­chase of por­tions of the bank’s Euro Medium Term Note pro­gramme (EMTN) bonds in is­sue, as an­nounced on July 14, Septem­ber 5 and Septem­ber14, 2016, and cer­tain ad­di­tional but lim­ited open mar­ket trades there­after. The to­tal rand equiv­a­lent of all EMTN bond re­pur­chases, to­gether with the early set­tle­ment of cer­tain rand bi­lat­eral fund­ing ar­range­ments, as at Septem­ber 30, was R11.7 bil­lion. The global scale rat­ing also ap­plies to the bank’s EMTN pro­gramme and all notes is­sued un­der the $6bn (R79.78bn) EMTN pro­gramme, which are listed ei­ther on the Lon­don Stock Ex­change or the Swiss Se­cu­ri­ties Ex­change. The R25bn Do­mes­tic Medium Term Note pro­gramme and all notes is­sued un­der that pro­gramme are not rated. African Bank in­tends to re­lease its in­terim re­sults for the six months to end March on May 23. – Sandile Mchunu

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