Eskom to sever state backing that allows cheap debt
02 July 2012: Money Web Online
Eskom Holdings, which is spending $40bn to end the power shortages afflicting South Africa’s economy, plans to sever the government backing that allows it to borrow more cheaply than most emerging-market utilities.
South Africa’s biggest state-owned borrower shares the nation’s credit rating of BBB+ at Standard & Poor’s, which has helped drive the yield on Eskom’s 10-year dollar bonds down 103 basis points this year to a record 4.47%. That’s less than the average yield of 4.66% for emerging-market utilities’ dollar debt, which has dropped 105 basis points, according to JPMorgan Chase & Co.’s CEMBI indexes. Read more…