Moody's cuts South African National Roads

Moody's Investors Service said it downgraded the South African National Roads Agency Ltd.'s long-term issuer ratings to Baa3 (global scale, local and foreign currency) and to A3.za (South African national scale), from Baa2 and A2.za, respectively, to reflect the company's intensifying cash flow pressures.

In addition, these ratings and the P-3 (global scale short-term rating) were placed on review for further downgrade.

Moody's said the decision to downgrade South African National Roads' rating was driven by the significant deterioration in the company's cash flows, which are necessary to meet its operating expenses and to service its very high debt levels acquired to fund the Gauteng Freeway Improvement Project.

This cash-flow strain has arisen from the prolonged delay in the realization of e-toll revenue earmarked to repay Gauteng Freeway Improvement Project-related debt and casts doubt on the company's financial health in the medium-term, the agency said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.