Rating agency reaffirms Transnet credit rating

Thursday, November 3, 2011

Pretoria - Credit rating agency Standard &Poor's (S&P) has reaffirmed Transnet's investment grade credit rating based on its credit profile.

"Standard & Poor's has reaffirmed Transnet's investment grade credit rating based on the company's stand-alone credit profile, confirming Transnet's attractiveness for investors and the success of its efforts to strengthen the balance sheet," said the parastatal on Thursday.

The agency reaffirmed Transnet's local currency at 'A-' and the foreign currency at 'BBB+', with a stable outlook on both.

Transnet spokesperson Mboniso Sigonyela said the affirmation will allow Transnet to continue raising funds in the debt capital markets on the strength of its balance sheet and importantly without guarantees from government. This as the ratings was informed by Transnet's standalone credit profile reflecting continued operational and financial improvements and increasing profitability.

Last week, the company announced that revenue was up (for the six months to 30 September) R22.4 billion compared to the same time last year.

"Maintaining an investment grade credit rating forms the foundation of the company's borrowing strategy that will enable the successful execution of the five-year R110 billion capital investment programme aimed at increasing capacity and efficiency."

Transnet successfully concluded a loan of US $400 million, an "A" loan from the African Development Bank, with the expected drawdown during the current financial year.

A "B" loan of up to US $410 million has also been granted by a syndication of international institutions.

The loan, which forms part of the company's fundraising efforts aimed at beefing up its capital investment programme, will be committed exclusively to financing Transnet Freight Rail's capitalised maintenance programme.

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