Moody’s downgrades Sasol

Moody’s Investors Service said it downgraded Sasol Ltd.’s long-term issuer rating to Baa2 from Baa1.

Moody’s also said it downgraded Sasol’s Aa3.za national scale issuer rating to A1.za.

The outlook is negative.

The downgrades reflect a forecast that Sasol will sustainably exceed Moody’s adjusted debt/equity downward guidance of 40% over the next three years, the agency said.

This is a result of the additional debt raised to fund development of its Ethane Cracker in Lake Charles, La., Moody’s said.

The agency also said it expects that Sasol’s credit metrics will remain constrained, despite a depreciation of the South African rand versus U.S. dollar exchange rate, given the weak oil and gas price environment.

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