LAND BANK DOWNGRADED DEEPER INTO JUNK STATUS

RATING agency Moody’s has downgraded the Land and Agricultural Development Bank deeper into sub-investment grade after the state company missed another debt interest payment due to liquidity challenges. The Land Bank, the country’s largest agricultural-focused lender, defaulted on the loans totalling R50 billion in April. And in a notice on the JSE on June 1, the Land Bank said that it was not in a position to meet interest payments of nearly R120 million. Moody’s cut the Land Bank’s long-term issuer ratings by two notches to B3 from B1, six rungs into sub-investment, and changed the outlook to negative, citing the missed debt payments. “(The) rating actions reflect the combination of longerthan-anticipated delays in rectifying the events of default triggered by the bank’s failure to make payments when due to its lenders,” Moody’s said late on Tuesday. “The negative outlook reflects the high implementation risks of the restructuring plan.” Moody’s downgraded the state firm in January, while Fitch has also warned of downgrades. About R5.7bn of the Land Bank’s debt is guaranteed by the government, and the National Treasury has said it cannot afford to recapitalise the bank as it fights the economic fallout of the Covid-19 pandemic. A Land Bank spokesperson said its chief executive was on an “electronic roadshow” negotiating waivers and stand-still agreements with creditors, who have divided themselves in two groups led by Standard Bank and the Association for Savings and Investment South Africa. | Reuters