New York, United States — ESI-AFRICA.COM — 20 January 2011 – Fitch Ratings “’ a global rating agency committed to providing the world’s credit markets with independent and prospective credit opinions, research, and data “’ has revised the outlooks for Eskom’s and Transnet’s long-term issuer default ratings (IDR) to stable from negative, following the revision to South Africa’s sovereign ratings.
A favourable rating will ease the cost of borrowing in international markets as the two entities seek funds for their multi-billion rand expansion programmes.
Earlier this week, Fitch “’ which is headquartered in New York and London “’ lauded South Africa’s growth prospects, saying it had emerged from recession with its credit fundamentals roughly in line with, or slightly better than, its peers.
After falling 1.7% in 2009, Fitch expects real GDP growth to have recovered to 2.8% in 2010. Medium-term budget deficits and debt ratios have been revised downwards, it added.
“Spending by state entities Eskom and Transnet will continue to provide a stimulus to the economy,” Fitch contended. It has confirmed the existing ratings for the two state entities with the outlooks upgraded from negative to stable.