Sharenet Sites 
Sharenet Sites
Moodys rating action
ESKOM HOLDINGS SOC LIMITED
Market Notice
Subject: Rating Action
(ESKOM HOLDINGS SOC LIMITED)
11 November 2014
====================================================
Moody’s downgrades Eskom to Ba1 following sovereign action; outlook changed to stable
Friday, 07 November 2014: Moody's Investors Service has downgraded its senior unsecured rating on
Eskom following its revision of the South African Sovereign debt rating on Thursday, 06 November
2014. Eskom’s senior unsecured rating has been lowered to Ba1 from Baa3 on the Moody’s scale,
the outlook on the rating was changed to stable from negative.
In terms of Moody’s rating methodology for Government Related Issuers, Eskom’s senior unsecured
bond rating is primarily driven by Moody’s assumption of a high level of potential government support
in case of financial distress. Given Eskom’s strong linkage with the South African government and its
high sensitivity to changes in the sovereign credit profile, the one-notch downgrade of its senior
unsecured ratings to Ba1 (stable) reflects the one-notch downgrade of South Africa’s ratings to Baa2
(stable). Accordingly, the two-notch differential between Eskom and the government’s ratings remains
unchanged.
In its rationale for the downgrade, Moody’s states that their assumption of a high level of government
support in the event of financial distress is underpinned by Eskom’s strategic importance to the
government's social and economic policy as the country’s dominant electricity supplier. Moody’s also
revised downwards its assessment of the standalone credit quality of Eskom (expressed as a
baseline credit assessment, or BCA) to b3 from b1.
Tsholofelo Molefe, Eskom Finance Director said: “Eskom has with the support of the shareholder
ministries developed measures to resolve the financial challenges and has made great progress. We
are therefore deeply disappointed with Moody’s rating action. We will continue to work towards
restoring Eskom’s financial sustainability through the identified measures that we will be
implementing’.
Tshediso Matona, Eskom’s Chief Executive said: “We take note of Moody’s analysis of the challenges
facing Eskom and in the interests of the economy we will continue to focus on security of supply
without compromising Eskom’s return to financial sustainability.”
====================================================
Further information on the Eskom Holdings SOC Ltd bond issue can be obtained from
Francois Venter ESKOM (011 800-4050)
Date: 11/11/2014 08:30:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
