LIBERTY GROUP LIMITED - Rating Agency

Rating Agency

LIBERTY GROUP LIMITED
Incorporated in the Republic of South Africa
(Registration number: 1957/002788/06)
Instrument Code: LGL03 ISIN: ZAG000100249
Instrument Code: LGL04 ISIN: ZAG000105784
Instrument Code: LGL05 ISIN: ZAG000122250
Instrument Code: LGL06 ISIN: ZAG000139536
Instrument Code: LGL07 ISIN: ZAG000139544
Instrument Code: LGL08 ISIN: ZAG000146226
Instrument Code: LGL09 ISIN: ZAG000146234

(“Liberty”) or (“the Issuer”)

Rating Agency Action on South Africa-Based Insurers and
Reinsurers following the South African Sovereign Downgrade

S&P Global Ratings (“S&P”) has recently taken rating action on
the long-term foreign currency sovereign credit rating of the
Republic of South Africa from 'BB+' to 'BB' and on the local
currency sovereign credit rating from 'BBB-' to 'BB+'. S&P has
also lowered the long-term South Africa national scale credit
rating from 'zaAAA' to 'zaAA+' and has subsequently lowered the
credit ratings on several South African-based insurers and
reinsurers.

The rating action is a direct consequence of the sovereign
downgrade, reflecting S&P’s view that South African insurers
face increased exposure to credit risk within their asset
portfolios. S&P also notes that this exposure to higher credit
risk is mitigated by the strong capital position of the South
African insurers which would enable them to withstand the stress
associated with a sovereign currency default, if one was to
occur.

In accordance with paragraph 4.27 of the JSE Debt Listings
Requirements, noteholders are advised that S&P has accordingly
revised the credit ratings on the Issuer's notes as follows:

Ratings from 'zaAA' to 'zaA' on deferrable subordinated notes:
-LGL06
-LGL07
-LGL08
-LGL09

Ratings from 'zaAA+' to 'zaAA-' on non-deferrable subordinated
notes:
-LGL03
-LGL04
-LGL05

Bondholders are advised that Liberty reported a strong capital
coverage ratio of 3.26x as at 30 September 2017 and remains well
capitalised post the sovereign downgrade.      The impact of a
sovereign downgrade was anticipated and actions were taken to
ensure that the balance sheet and asset liability position of
Liberty were appropriately structured.

Johannesburg
30 November 2017

Debt Sponsor
The Standard Bank of South Africa Limited

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