Fitch Affirms Transnet's Government Guaranteed Debt at 'AAA(zaf)'
Fitch Ratings-London/Johannesburg-21 July 2009: Fitch Ratings has today affirmed the National Long-term ratings of Transnet Limited's (Transnet) four government guaranteed debt issues at 'AAA(zaf)' with Stable Outlooks respectively. The ratings only cover Transnet debt issues that are explicitly guaranteed by the South African government.
The South African government guarantee currently applies to the T011 and T018 domestic bonds, which mature in April 2010 and July 2014 respectively, and the Euro 42 and Euro 42A Eurorand bonds, which mature in April 2028 and March 2029 respectively. The remainder of Transnet's debt, the commercial paper programme and domestic bonds are not guaranteed by the government.
Transnet's FYE09 results reflected increased revenues, despite lower freight volumes in H209. Volume and margin pressure is expected to persist during the remainder of 2009 and only recover from late 2010 onwards, in line with Fitch's expectations of a delayed economic recovery. Transnet's credit metrics, notably the company's adjusted net leverage, significantly deteriorated during FY09. Fitch expects the company's credit metrics will deteriorate further due to the ongoing economic downturn and expects debt levels to increase to fund the ZAR80.3bn capital expenditure programme.
Transnet is a wholly state-owned transport conglomerate. The company's activities are focussed on rail freight transport, ports and pipelines.
Contact: Roelof Steenekamp, Johannesburg, Tel: +27 11 380 0900; Karabo Matentji, +27 11 380 0910.
Media Relations: Peter Fitzpatrick, London, Tel: + 44 (0)20 7417 4364, Email: peter.fitzpatrick@fitchratings.com.
Note to Editors: 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.
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