{"id":9479,"date":"2012-03-30T15:41:32","date_gmt":"2012-03-30T13:41:32","guid":{"rendered":"http:\/\/www.myza.co.za\/03\/text-sp-revises-otlk-on-development-bank-of-southern-africa-to-negative\/"},"modified":"2012-03-30T15:41:32","modified_gmt":"2012-03-30T13:41:32","slug":"text-sp-revises-otlk-on-development-bank-of-southern-africa-to-negative","status":"publish","type":"post","link":"https:\/\/www.myza.co.za\/press\/text-sp-revises-otlk-on-development-bank-of-southern-africa-to-negative\/","title":{"rendered":"TEXT-S&P revises otlk on Development Bank of Southern Africa to negative"},"content":{"rendered":"

\t\t<\/span><\/p>\n

<\/span><\/p>\n

<\/span><\/p>\n

Rationale<\/p>\n

<\/span><\/p>\n

The ratings on DBSA are based on an equalization with the ratings on the Republic of South
\nAfrica (foreign currency BBB+\/Negative\/A-2; local currency A\/Negative\/A-1), reflecting Standard
\n Poor’s Ratings Services’ opinion that there is an “almost certain” likelihood that the South
\nAfrican government would provide timely and sufficient extraordinary support to DBSA in the
\nevent of financial distress.<\/p>\n

<\/span><\/p>\n

In accordance with our criteria for government-related entities, our rating approach is
\nbased on our view of DBSA’s:<\/p>\n

<\/span><\/p>\n

— “Critical” role as the South African government’s primary vehicle for promoting
\ninfrastructure development in the country’s municipal and utilities sectors and in the countries
\nof the Southern African Development Community (SADC); and<\/p>\n

<\/span><\/p>\n

— “Integral” link with the South African government, through 100% ownership and ongoing
\ngovernment supervision.<\/p>\n

<\/span><\/p>\n

Our assessment of “almost certain” extraordinary support is reinforced by demonstrations of
\nstate support. In November 2009, the government provided DBSA with South African rand (ZAR) 15.2
\nbillion (about $2.1 billion) in debt guarantees and it has stated its commitment to increasing
\nDBSA’s callable capital by an equivalent amount to replace the guarantee.<\/p>\n

<\/span><\/p>\n

In our view, DBSA has good capitalization; adjusted total equity plus loan loss reserves
\ncovered 47.7% of customer loans at March 31, 2011. In the past, capital has benefited from
\nadequate internal capital generation but a lower interest rate environment restrained 2009 and
\n2010 earnings (which feed into capital reserves). Large lending concentrations represent a
\nmoderate threat to otherwise robust levels of capital, with the top-20 loans accounting for
\naround 110% of common shareholders’ equity (CSE). Positively, DBSA’s asset quality continues to
\nimprove alongside South Africa’s gradual economic recovery. At March 31, 2011, nonperforming
\nloans (impaired, 90-day overdue, and restructured loans) accounted for 4.52% of total loans,
\ndown from 5.12% one year earlier.<\/p>\n

<\/span><\/p>\n

DBSA is funded through its strong capital position and the international and domestic
\nwholesale markets. The bank’s public-sector status gives it good access to the capital markets,
\nalthough pricing tends to be slightly higher than for South African entities that benefit from a
\nsovereign guarantee.
\n\u00a0 Continued…<\/strong><\/span><\/p>\n

<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

Rationale The ratings on DBSA are based on an equalization with the ratings on the Republic of South Africa (foreign currency BBB+\/Negative\/A-2; local currency A\/Negative\/A-1), reflecting Standard Poor’s Ratings Services’ opinion that there is an “almost certain” likelihood that the South African government would provide timely and sufficient extraordinary support to DBSA in the event […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","ngg_post_thumbnail":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[1],"tags":[830,2370,183],"class_list":{"0":"post-9479","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-south-africa","7":"tag-news","8":"tag-reuters","9":"tag-south-africa-2","10":"entry"},"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/posts\/9479","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/comments?post=9479"}],"version-history":[{"count":0,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/posts\/9479\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/media?parent=9479"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/categories?post=9479"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/tags?post=9479"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}