The rand plumbed a record low after the country lost its last investment-grade credit rating, and investors anticipated it may slide deeper into junk as the spread of the coronavirus decimates the economy.
Browsing: Moody’s Investor Service
Moody’s cut South Africa’s credit rating below investment grade, delivering the country a full house of junk assessments as it grapples with a nationwide lockdown.
Eskom implemented power cuts on Wednesday amid maintenance problems. The rand weakened as investors fretted about the effect on economic growth.
Moody’s Investors Service hasn’t said it, but investors already think it: South Africa’s credit is junk.
Eskom urgently needs a plan to turn profitable or South Africa’s state-owned utility will collapse under mounting debt, according to credit agency Moody’s Investors Service.
South Africa’s decision to more than double its financial support for Eskom is “credit negative” for the sovereign rating as it’s an additional drain on the budget, Moody’s Investors Service said.
Eskom is moving to stage-4 load shedding with effect from 1pm on Monday. This means that the utility will shed 4GW of electricity, up from the 2GW it was shedding on Monday morning.
Beyond a large increase in tariffs, a material improvement in Eskom’s financial profile is not expected before new generation capacity comes on stream, Moody’s Investors Service said on Tuesday