S&P raises Transnet

Standard & Poor's said it raised its long-term local currency rating on Transnet Ltd. to A from A-.

At the same time, the BBB+ long-term foreign currency rating and the zaAA+/zaA-1 South Africa national-scale ratings were affirmed, the agency said.

The outlook is stable.

S&P added that the ratings on Transnet reflect 100% ownership by the Republic of South Africa (foreign currency, BBB+/stable/A-2, local currency, A+/stable/A-1), strong ongoing and expected extraordinary government support, dominant business positions, continued operational and financial improvements, high profitability and the strong contribution of regulated businesses which represent almost one-half of operating profit.

These strengths are offset by exposure to the volatile South African economy, a large and rising capital expenditure plan and an increase in debt in the next two to three years, the agency noted.

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