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Transnet says well-positioned to withstand downgrade

Transnet says well-positioned to withstand downgrade

Photo by Duane Daws

7th April 2017

By: Megan van Wyngaardt

Creamer Media Contributing Editor Online

     

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Standard & Poor’s (S&P’s) Global Ratings has downgraded Transnet’s long-term foreign currency sovereign credit rating from BBB- to BB+, in line with its assessment of the sovereign rating.

S&P’s, however, maintained Transnet’s standalone credit profile at bbb, which the parastatal said reflected its strong financial metrics and adequate liquidity.

CEO Siyabonga Gama said S&P’s affirmation and acknowledgement of the critical role that Transnet plays in South Africa's economy as a provider of essential infrastructure services was testament of the strong and agile manner in which Transnet management was navigating the tough macroeconomic challenges.

About 26% of Transnet’s debt portfolio had a credit rating clause with a trigger below subinvestment grade. Between May and November 2016, management negotiated with its lenders to lower and relax the credit rating default triggers to below subinvestment grade.

Transnet CFO Garry Pita further pointed out that the entity had secured more than R16-billion in unused short-term credit facilities that were available within 24 hours, as well as long-term specific committed funding in excess of R15-billion.

“We also have access to the domestic and global capital markets through the domestic medium-term note and global medium-term note programmes amounting to R93-billion to meet funding commitments.”

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Edited by Chanel de Bruyn
Creamer Media Online Managing Editor

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