Fitch Revises Outlooks on Sanlam Capital Markets and Genbel Securities to Negative
Fitch Ratings-London/Johannesburg-27 May 2009: Fitch Ratings has today revised the Outlooks on Sanlam Capital Markets Limited (SCM) and its parent company Genbel Securities Limited (Gensec) to Negative from 'Stable'. Fitch has simultaneously affirmed both entities' National Long-term ratings at 'A+(zaf)', National Short-term ratings at 'F1(zaf)' and Support Ratings at '2'. At the same time, the agency has affirmed SCM's guaranteed obligations at a Long-term rating of 'AA-(zaf)' and a Short-term rating of 'F1+(zaf)'.
The rating actions follow Fitch's revision of Sanlam Limited's (Sanlam, rated 'AA-(zaf)') Outlook to Negative from 'Stable' on 26 May 2009. Sanlam wholly-owns both SCM and Gensec and is a leading domestic financial services provider. The two entities' ratings are solely derived from the expected support they would both receive from Sanlam if required. The ratings on SCM's guaranteed obligations reflect the direct guarantee from Sanlam for selected creditors.
SCM reported an operating loss of ZAR35m during FY08 compared with a profit of ZAR137m during FY07 following mark-to-market losses on debt instruments and reduced trading activity in a challenging operating environment. Management have given no guidance on earnings for FY09.
SCM is a wholly-owned subsidiary of Gensec, which in turn is wholly owned by Sanlam. It is a non-bank financial institution engaged in capital markets trading, debt and equity structuring and origination. It also offers risk management and brokerage services, mainly to institutional clients in both the public and private sectors, as well as to entities in South Africa's investment management industry.
Contacts: Denzil de Bie, Johannesburg, Tel: +27 11 380 0911; Anthony Walker: +27 11 380 0912.
Media Relations: Hannah Warrington, London, Tel: +44 (0) 207 417 6298, Email: hannah.warrington@fitchratings.com.
Fitch's National ratings provide a relative measure of creditworthiness for rated entities in countries with relatively low international sovereign ratings and where there is demand for such ratings. The best risk within a country is rated 'AAA' and other credits are rated only relative to this risk. National ratings are designed for use mainly by local investors in local markets and are signified by the addition of an identifier for the country concerned, such as 'AAA (zaf)' for National ratings in South Africa. Specific letter grades are not therefore internationally comparable.
Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.
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