Moody & # 39; s – The Zimbabwe Mail



JOHANNESBURG (Reuters) – Moody's has warned South Africa again on Tuesday that growing government debt linked to the rescue of state-owned companies will continue to put pressure on the country's investment grade status.

Moody's was the last of three major rating agencies to give investment grade rating to South Africa, so markets are sensitive to any pronouncement it makes about the fiscal and economic strength of the more industrialized economy from Africa.

"The credit profile will face negative pressure if Moody's expects that the risk of public debt and contingent liabilities of state-owned companies will continue to rise to levels no more consistent with Baa3," said Lucie Villa, vice president senior Moody's credit in a survey. report.

Moody's postponed last month a review of South Africa's credit quality, a relief boosting the rand and local bonds.

In the survey report, Moody's stated that while South Africa's public debt was similar to other countries ranked at the same level, the upward trajectory along with weak economic growth was worrisome.

In February, the South African National Treasury granted Eskom power company a ransom of 69 billion rand ($ 4.9 billion) over the next three years to help it repay its debt of 420 billion rand.

But the company said this month that it needed more money to survive and avoid the implementation of nationwide blackouts that triggered in February and March, which should have cushioned growth in the first quarter.

The rand hardly followed the survey report, trading steadily at 14.0800 at 1015 GMT.

Peter Attard Montalto, head of capital markets research at Intellidex, said: "Today's report and its contradictory statements will do nothing to alleviate the growing unease among investors about Moody's rating in South Africa" ($ 1 = $ 14.0731)


Source link