Feb 06 – In response to investors’ questions regarding our methodology for assessing the
credit quality of rated South African infrastructure companies, Standard Poor’s Ratings
Services has published a QA titled “Examining The Factors Behind The Ratings On South
African Infrastructure Companies ESKOM, Rand Water, And Transnet.” We
consider this trio of companies to be government-related entities, and therefore we take into
account our assessment of their stand-alone credit profiles as well as their links to, and roles
for, the Republic of South Africa (foreign currency BBB+/Stable/A-2, local currency
A/Stable/A-1).
(Note: To accompany the report, there is a related CreditMatters TV segment
titled, “South African Infrastructure: Behind The Ratings On ESKOM, Rand
Water, And Transnet.”)
In the QA, we address the following questions:
— What is Standard Poor’s analytical approach to rating these three
South Africa-based infrastructure companies?
— How does Standard Poor’s assess the stand-alone credit quality of
the three GREs?
— How does Standard Poor’s evaluate the likelihood of extraordinary
government support for each GRE?
— How does the difference in Standard Poor’s assessment of ESKOM’s and
Transnet’s SACPs, roles for, and links with the government affect the issuer
credit ratings?
Continued…
