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SANRAL- Rating Downgrade by Moody's
THE SOUTH AFRICAN NATIONAL ROADS AGENCY SOC LIMITED
(Registration number 1998/009584/30)
“SANRAL”
(Established and incorporated as a public company under The South African National Roads Agency
Limited and National Roads Act, 1998)
(the “Issuer” or the “Company”)
Bond Issuer Code: BINRA
SANRAL RATING ADJUSTMENT BY MOODY’S INVESTOR SERVICES ("MOODY’S")
Notice is hereby given in terms of section 4.25 of the JSE Debt Listings Requirements that Moody’s
has as at the 19 January 2015 assigned a negative outlook on South African National Roans Agency
Limited’s (“SANRAL”) issuer rating from stable and has affirmed the BAA3/P-3 (global scale, local and
foreign currency) and A3.za/P-2.za (South African national scale) ratings.
SANRAL’s Baseline Credit Assessment (BCA) has also been lowered from ba3 to b2.
This change is primarily due to Moody’s assessment of SANRAL’s decrease in financial strength as a
result of a weaker than expected e-toll revenue collection from the Gauteng Freeway Improvement
Project (GFIP) scheme as well as SANRAL’s plans to increase its debt issuance.
Non-payment of e-tolls has increased following a decision by the Province of Gauteng to establish a
panel to assess the impact of e-tolls in doing business in the province, which sparked speculation
among the general public that the e-toll project may be abandoned. This caused e-toll revenue
collections to drop by 38% from July to November 2014, which in turn led SANRAL to revise
downward its expected e-toll revenue for the fiscal year 2014-15 to ZAR907 million, against ZAR1.4
billion previously.
As e-toll revenue was planned to be the main contributor towards the reduction of borrowing
requirements, as well as help improve cash flows, the lower than expected revenues will likely lead to
an increase in SANRAL's debt level. Moody's anticipates that SANRAL's debt will increase more than
expected and reach ZAR44.1 billion by 31 March 2015, from ZAR39.6 billion at 31 March 2014.
Moody's will however continue to monitor e-toll collections in the coming months as well as
SANRAL's cash flow and any potential impact on its ratings.
23 January 2015
Debt Sponsor
Absa Bank Limited (acting through its Corporate and Investment Banking division)
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