JOHANNESBURG Oct 1 (Reuters) – Credit agency Moody’s on
Monday cut its rating on South African power utility Eskom
, fixed-line operator Telkom SA and 12
municipalities, following a similar downgrade of Africa’s top
economy last week.
It also lowered its outlook on miner Gold Fields Ltd
to “stable” from “positive”, citing concern about the
impact of labour unrest on South Africa’s mining industry.
The agency said in a statement it cut Eskom’s senior
unsecured bond rating by one notch, to Baa3 from Baa2, a move
that could drive up borrowing costs for the utility as it looks
to fund infrastructure spending.
The state-owned utility is expected to tap the bond market
for some of a planned 300 billion rand ($36.06 billion) in
funding.
Moody’s made a similar cut to Telkom’s rating, which was
also lowered to Baa3, while 12 local governments had their
long-term ratings cut.
The agency on Thursday cut the government bond rating of
Africa’s top economy by one notch, citing worries about the
negative investment climate – from creaking infrastructure to
concerns about future political stability.
Investor sentiment has been soured by a series of wildcat
strikes in the mining industry in recent weeks, which have
hamstrung production in the world’s top platinum producer and
No.4 gold producer.
Critics have also charged that the strikes have exposed
President Jacob Zuma’s ruling African National Congress as
ineffectual and out of touch with millions of poor South
Africans.
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