Moody’s downgrades Sasol

Moody’s Investors Service said it downgraded Sasol Ltd.’s corporate family rating to Ba2 from Ba1 and probability of default rating to Ba2-PD from Ba1-PD. The national scale CFR has been downgraded to A1.za from Aa2.za. Moody’s placed the ratings on review for downgrade.

“The decision to downgrade the ratings to Ba2 reflects Moody’s view that credit metrics will deteriorate in the next 12 to 18 months, contrary to the rating agency’s previous expectation of a moderate deleveraging,” said the agency in a press release.

“Sasol has been caught at the intersection of a series of credit negative developments, including a significant deterioration in the operating environment from a combination of the collapse in oil prices, widening impact of the coronavirus outbreak and weakening of South Africa’s sovereign credit quality at a time when its balance sheet has reached peak gearing because of Lake Charles Chemicals Project (LCCP) related capital spending,” Moody’s said.

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