S&P Global Ratings downgrades Transnet's credit ratings

S&P Global Ratings (S&P) has downgraded Transnet's credit ratings due to high debt and negative operating cash flow.

- PHILIPPA LARKIN

It lowered the long-term local currency and foreign currency ratings from BBto B+. The standalone credit profile was downgraded from 'b' to 'ccc+', while its national scale rating was changed from 'zaAA-/zaA-1+' to 'zaA/zaA-1'.

It kept the outlook stable and said it reflects S&P's view that Transnet will not face any material payment or liquidity events given the current R51 billion government guarantee framework.

S&P highlighted several issues in its rating report. "The downgrade reflects the incremental deterioration of the financial profile in the past few years that extraordinary government support could partly mitigate but will not fully offset in our view, especially as the support is principally in the form of government guarantees," it said.