Moody's barking up the wrong tree ,Sunday Times, Business Times18 Sep 2016,Andile Khumalo
Ratings agency's SOE targets are a bizarre mix JUST when I thought I finally understood how ratings agencies work, along came this week's decision by Moody's to place five stateowned entities on immediate review. Moody's rationale for placing on immediate review for downgrade the ratings of Eskom, the South African National Roads Agency, the Industrial Development Corporation (IDC), the Development Bank of Southern Africa (DBSA) and the Land Bank caught me by surprise. Even though those demigods we call analysts say we shouldn't be at all surprised because our country is hopeless, I think the decision and more importantly the rationale — while justified for some SOEs — lacks credibility for others. I cannot blame Moody's for saying it is concerned about Sanral's “continuing deterioration of the Gauteng Freeway Improvement Project cash flows and rising funding challenges at a time when [it] faces large debt maturities”.