S&P downgrades Telkom in line with sovereign ratings

13th May 2020

By: Creamer Media Reporter

     

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Ratings agency S&P Global Ratings (S&P) has revised JSE-listed Telkom’s long-term issuer rating in line with the sovereign ratings downgrade in April.

Telkom, which is viewed as a government-related entity, has been revised downwards from BB+ to BB, with the negative outlook revised to stable.

“This rating action follows the downgrade of South Africa’s long-term local currency rating on April 29, from BB to BB- with a stable outlook,” the company said in an update to shareholders.

This was a result of the potential impact of the Covid-19 pandemic on the fiscus and the growth outlook.

“However, the rating agency has always maintained the low likelihood of negative interventions by government.

“It also considers a moderate impact of Covid-19 on Telkom’s financial profile and recognises the company’s modest financial risk. The ascribed stable outlook also takes into account Telkom’s standalone credit profile of bbb-,” Telkom concluded.

Edited by Creamer Media Reporter

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