Moody’s downgrades Eskom to Ba1

Moody's Investors Service said it downgraded the senior unsecured ratings of Eskom Holdings SOC Ltd. to Ba1 from Baa3.

The outlook is stable.

Eskom's senior unsecured bond rating is primarily driven by Moody's assumption of a high level of potential government support in case of financial distress. Given Eskom's strong linkage with the South African government and its high sensitivity to changes in the sovereign credit profile, the one-notch downgrade of its senior unsecured ratings to Ba1 (stable) reflects the one-notch downgrade of South Africa's ratings to Baa2 (stable) on Nov. 6.

Accordingly, the two-notch differential between the company's and the government's ratings remains unchanged.

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