Following the change in methodology and rating criteria used by Fitch Ratings to rate the sovereign and government entities; the rating agency has downgraded Eskom’s Long-term local currency Issuer Default Rating (IDR) to ‘BBB-’ from ‘BBB’. Fitch Ratings has also affirmed Eskom’s National long-term and short-term ratings at ‘AAA’ and ‘F1+’, respectively. The outlook is stable.

In terms of Fitch’s rating methodology for Government Related Issuers, Eskom’s rating revision is primarily driven by Fitch’s downgrade of South Africa’s Long-term local currency IDR to ‘BBB-’ from ‘BBB’; outlook is stable .This decision was as a result of Fitch’s recalibration of the sovereign rating criteria; it is important to note that the revision of the rating was not because of any fundamental changes on the sovereign credit.

Given Eskom’s strong link and support from the South African government and its high sensitivity to changes in the sovereign credit profile, Eskom’s downgrade reflects the downgrading of South Africa’s rating.

Eskom’s National long-term and short-term ratings remain unchanged.

Anoj Singh, Eskom Chief Financial Officer said: “We note the decision by Fitch to downgrade Eskom on the back of the Sovereign downgrade; in the interests of the economy we will continue to focus on stabilizing the security of supply without compromising Eskom’s financial sustainability.”

Issued by Eskom