TEXT-S&P cuts ESKOM to 'BBB'; outlook negative

(The following statement was released by the rating agency)

Oct 17 -

Overview

-- On Oct. 12, 2012, we lowered the long-term foreign and local currency ratings on the Republic of South Africa to 'BBB' and 'A-', respectively. The outlook remains negative.

-- In accordance with our criteria for government-related entities, we are lowering to 'BBB' from 'BBB+' our long-term foreign and local currency corporate credit ratings on South African power utility ESKOM Holdings SOC Ltd. (ESKOM).

-- The 'b' stand-alone credit profile on ESKOM remains unchanged and reflects ESKOM's "fair" business risk profile and "highly leveraged" financial risk profile.

-- The negative outlook on ESKOM reflects that on South Africa, and our view that a downgrade of the sovereign would likely result in a downgrade of ESKOM.

Rating Action

On Oct. 17, 2012, Standard & Poor's Ratings Services lowered its long-term local and foreign currency corporate credit ratings on South Africa-based power utility ESKOM Holdings SOC Ltd. (ESKOM) to 'BBB' from 'BBB+'. The outlook remains negative.

At the same time, we affirmed our long- and short-term South Africa national scale ratings on ESKOM at 'zaAA/zaA-1'.