S&P downgrades Eskom

S&P said it lowered its long-term foreign and local currency issuer credit ratings on Eskom Holdings SOC Ltd. to CCC+ from B-.

The outlook is negative.

At the same time, the agency lowered the long-term South Africa national scale rating on Eskom to zaB from zaBB- and affirmed the zaB short-term national scale rating.

S&P said the downgrade reflects a view that the possibility of a distressed exchange or default in the next six months continues to hang over Eskom despite the utility having secured ZAR 30 billion in short-term funding commitments from local and international funders over January and February of this year.

The agency said the action also incorporates a view that the support provided by the government to Eskom over the past few months has been insufficient.

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