S&P upgrades Eqstra

Standard & Poor's said it raised the long-term South Africa national scale ratings on Eqstra Holdings Ltd. to zaBBB+ from zaBBB and affirmed its short-term rating at zaA-2.

The upgrade reflects both the significant reduction in medium-term refinancing risks due to renegotiation of the bank funding package, S&P said, and improving profitability and cash flow due to lower funding costs and earnings growth.

The ratings are supported by good levels of capitalization, a strong local market position and customer franchise and relatively diversified business profile for an operating leasing company, the agency said.

The ratings are constrained by Eqstra's reliance on the local bank funding, S&P added, and the cyclicality of earnings and geographic concentrations in Southern Africa.

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