Announcements

GCR downgrades the international scale ratings of South African rated entities

Johannesburg, 3 May 2017 – Global Credit Ratings has downgraded the international scale, local currency ratings of certain South African rated entities from the sectors of Financial Institutions (banks and non-banks), Corporate & Public Sector Debt, and Insurance. The rating actions follow a revision of the mapping table used in according international scale, local currency ratings to rated entities and issues in South Africa.

RATING RATIONALE

The update to Global Credit Ratings’ (“GCR”) mapping table on 26 April 2017 followed a recent revision of the Republic of South Africa’s sovereign ratings by various accredited credit rating agencies. The mapping table specifies the international scale, local currency rating(s) that can be accorded to each South African national scale rating.

The rating actions taken today on the affected South African rated entities primarily reflect changes in the aforementioned mapping table. Accordingly, the rating actions do not reflect changes in the assessments of rating factors applicable to the credit profiles of the affected entities, barring the impact of the change in sovereign risk.

GCR will continue to monitor developments related to the sovereign rating, and will respond to any impact on its mapping table and ratings.

Rating action was taken on the following entities’ long-term (“LT”) and claims paying ability (“CPA”) international scale, local currency ratings (“ISR LC”) and outlooks:

Banks

Previous rating

Current rating

Rated entity

Rating date

LT ISR LC

Outlook

Rating date

LT ISR LC

Outlook

Absa Bank Limited*

Dec-16

BBB

Negative

Apr-17

BB+

Negative

The Standard Bank of South Africa Limited*

Dec-16

BBB

Negative

Apr-17

BB+

Negative

FirstRand Bank Limited*

Dec-16

BBB-

Stable

Apr-17

BB+

Negative

Nedbank Limited*

Dec-16

BBB-

Stable

Apr-17

BB+

Negative

Investec Bank Limited

Dec-16

BBB-

Stable

Apr-17

BB+

Negative

Sasfin Bank Limited

Dec-16

BB

Negative

Apr-17

BB-

Negative

Grindrod Bank Limited

Apr-17

BB

Negative

Apr-17

BB-

Negative

Finbond Group Limited

Dec-16

BB-

Stable

Apr-17

B+

Negative

Non-bank financial institutions

Previous rating

Current rating

Rated entity

Rating date

LT ISR LC

Outlook

Rating date

LT ISR LC

Outlook

National Housing Finance Corporation Soc Limited

Dec-16

BB+

Negative

Apr-17

BB

Negative

Quince Capital (Proprietary) Limited

Dec-16

BB+

Negative

Apr-17

BB-

Stable

Transaction Capital Limited

Dec-16

BB

Stable

Apr-17

BB-

Negative

IEMAS Financial Services (Co-operative) Limited

Apr-17

BB

Negative

Apr-17

BB-

Negative

Trust for Urban Housing Finance (TUHF Group)

Dec-16

BB-

Stable

Apr-17

B+

Negative

Corporates

Previous rating

Current rating

Rated entity

Rating date

LT ISR LC

Outlook

Rating date

LT ISR LC

Outlook

Educor Holdings Proprietary Limited

Dec-16

BB-

Stable

Apr-17

B+

Negative

Insurance

Previous rating

Current rating

Rated entity

Rating date

CPA ISR LC

Outlook

Rating date

CPA ISR LC

Outlook

Oakhurst Insurance Company Limited

Dec-16

BB

Stable

Apr-17

BB-

Negative

Santam Limited

Jul-16

BBB

Stable

Apr-17

BBB-

Negative

*Unsolicited/Public information ratings.

The national scale ratings and outlooks of all affected entities remain unchanged:

Banks

Current rating

Rated entity

Rating date

Long-term rating

Short-term rating

Outlook

Absa Bank Limited*

Apr-16

AA+(ZA)

A1+(ZA)

Negative

The Standard Bank of South Africa Limited*

May-16

AA+(ZA)

A1+(ZA)

Stable

FirstRand Bank Limited*

Nov-16

AA(ZA)

A1+(ZA)

Positive

Nedbank Limited*

May-16

AA(ZA)

A1+(ZA)

Stable

Investec Bank Limited

Oct-16

AA(ZA)

A1+(ZA)

Stable

Sasfin Bank Limited

May-16

BBB+(ZA)

A1-(ZA)

Stable

Grindrod Bank Limited

Apr-17

BBB+(ZA)

A2(ZA)

Stable

Finbond Group Limited

Oct-16

BBB-(ZA)

A3(ZA)

Stable

Non-bank financial institutions

Current rating

Rated entity

Rating date

Long-term rating

Short-term rating

Outlook

National Housing Finance Corporation Soc Limited

Nov-16

A+(ZA)

A1(ZA)

Negative

Quince Capital (Proprietary) Limited

Aug-16

A(ZA)

A1(ZA)

Stable

Transaction Capital Limited

Nov-16

A-(ZA)

A1-(ZA)

Stable

IEMAS Financial Services (Co-operative) Limited

Apr-17

BBB+(ZA)

A2(ZA)

Negative

Trust for Urban Housing Finance (TUHF Group)

Sep-16

BBB(ZA)

A3(ZA)

Stable

Corporate

Current rating

Rated entity

Rating date

Long-term rating

Short-term rating

Outlook

Educor Holdings Proprietary Limited

Dec-16

BBB-(ZA)

A3(ZA)

Stable

Insurance

Current rating

Rated entity

Rating date

Claims paying ability rating

Outlook

Oakhurst Insurance Company Limited

Dec-16

A-(ZA)

Stable

Santam Limited

Jul-16

AAA(ZA)

Stable

*Unsolicited/Public information ratings.

ANALYTICAL CONTACTS

Financial Institutions Corporate & Public Sector Debt Insurance
     
Primary Analyst Primary Analyst Primary Analyst
Omega Collocott Patricia Zvarayi Marc Chadwick
Sector Head: Financial Institution Ratings Senior Analyst Sector Head: Insurance Ratings
(011) 784-1771 (011) 784-1771 (011) 784-1771
omegac@globalratings.net patricia@globalratings.net chadwick@globalratings.net
     
Committee Chairperson Committee Chairperson Committee Chairperson
Marc Chadwick Eyal Shevel Omega Collocott
Sector Head: Insurance Ratings Sector Head: Corporate & Public Sector Debt Ratings Sector Head: Financial Institution Ratings
(011) 784-1771 (011) 784-1771 (011) 784-1771
chadwick@globalratings.net shevel@globalratings.net omegac@globalratings.net

APPLICABLE METHODOLOGIES AND RELATED RESEARCH

Market Announcement entitled, “GCR updates its mapping table for South Africa”, dated 26 April 2017

GCR’s South African Mapping Table, updated April 2017 (https://globalratings.net/ratings-info/rating-scales-definitions)

GCR’s Global Criteria for Rating Banks and Other Financial Institutions, updated March 2017

GCR’s Global Master Criteria for Rating Corporate Entities, updated February 2017

GCR’s Global Criteria for Rating Short Term Insurance Companies, updated July 2016

RATING LIMITATIONS AND DISCLAIMERS

ALL GCR’S CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://GLOBALRATINGS.NET/UNDERSTANDING-RATINGS. IN ADDITION, GCR’S RATING SCALES AND DEFINITIONS ARE ALSO AVAILABLE FOR DOWNLOAD AT THE FOLLOWING LINK: HTTP://GLOBALRATINGS.NET/RATINGS-INFO/RATING-SCALES-DEFINITIONS. GCR’S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, PUBLICATION TERMS AND CONDITIONS AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE AT HTTP://GLOBALRATINGS.NET.


SALIENT FEATURES OF ACCORDED RATINGS

GCR affirms that a.) no part of the ratings was influenced by any other business activities of the credit rating agency; b.) the ratings were based solely on the merits of the rated entity, security or financial instrument being rated; c.) such ratings were an independent evaluation of the risks and merits of the rated entity, security or financial instrument; and d.) the validity of the ratings is for a maximum of 12 months, or earlier as indicated by the applicable credit rating document.

The credit ratings have been disclosed to the issuers/companies listed above with no contestation of the ratings.

The ratings above are a combination of solicited and unsolicited ratings. In the case of solicited ratings, GCR has been compensated for the provision of the ratings. In the case of unsolicited ratings, the ratings are accorded based on publicly available information, and are provided for public information purposes.

GLOSSARY OF TERMS/ACRONYMS USED IN THIS DOCUMENT AS PER GCR’S GLOSSARIES

Credit Rating An opinion regarding the creditworthiness of an entity, a security or financial instrument, or an issuer of securities or financial instruments, using an established and defined ranking system of rating categories.
Downgrade The assignment of a lower credit rating to a company or sovereign borrower’s debt by a credit rating agency. Opposite of upgrade.
International Scale Rating LC International local currency (International LC) ratings measure the likelihood of repayment in the currency of the jurisdiction in which the issuer is domiciled. Therefore, the rating does not take into account the possibility that it will not be able to convert local currency into foreign currency or make transfers between sovereign jurisdictions.
Long-Term Not current; ordinarily more than one year.
Long-Term Rating Reflects an issuer’s ability to meet its financial obligations over the following three to five year period, including interest payments and debt redemptions. This encompasses an evaluation of the organisation’s current financial position, as well as how the position may change in the future with regard to meeting longer term financial obligations.
National Scale Rating Provides a relative measure of creditworthiness for rated entities only within the country concerned. Under this rating scale, a ‘AAA’ long term national scale rating will typically be assigned to the lowest relative risk within that country, which in most cases will be the sovereign state.
Risk The chance of future uncertainty (i.e. deviation from expected earnings or an expected outcome) that will have an impact on objectives.
Short-Term Current; ordinarily less than one year.
Short-Term Rating An opinion of an issuer’s ability to meet all financial obligations over the upcoming 12 month period, including interest payments and debt redemptions.
Sovereign Risk The risk of default by the government of a country on its obligations.

For a detailed glossary of terms, please click here

image_pdfPDF View

Leave a Reply



ALL GCR CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS, TERMS OF USE OF SUCH RATINGS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS, TERMS OF USE AND DISCLAIMERS BY FOLLOWING THIS LINK:HTTP://GCRRATINGS.COM. IN ADDITION, RATING SCALES AND DEFINITIONS ARE AVAILABLE ON GCR’S PUBLIC WEB SITE AT WWW.GCRRATINGS.COM/RATING_INFORMATION. PUBLISHED RATINGS, CRITERIA, AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. GCR's CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, COMPLIANCE, AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THIS SITE.

CREDIT RATINGS ISSUED AND RESEARCH PUBLICATIONS PUBLISHED BY GCR, ARE GCR’S OPINIONS, AS AT THE DATE OF ISSUE OR PUBLICATION THEREOF, OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES. GCR DEFINES CREDIT RISK AS THE RISK THAT AN ENTITY MAY NOT MEET ITS CONTRACTUAL AND/OR FINANCIAL OBLIGATIONS AS THEY BECOME DUE. CREDIT RATINGS DO NOT ADDRESS ANY OTHER RISK, INCLUDING BUT NOT LIMITED TO: FRAUD, MARKET LIQUIDITY RISK, MARKET VALUE RISK, OR PRICE VOLATILITY. CREDIT RATINGS AND GCR’S OPINIONS INCLUDED IN GCR’S PUBLICATIONS ARE NOT STATEMENTS OF CURRENT OR HISTORICAL FACT. CREDIT RATINGS AND GCR’S PUBLICATIONS DO NOT CONSTITUTE OR PROVIDE INVESTMENT OR FINANCIAL ADVICE, AND CREDIT RATINGS AND GCR’S PUBLICATIONS ARE NOT AND DO NOT PROVIDE RECOMMENDATIONS TO PURCHASE, SELL OR HOLD PARTICULAR SECURITIES. NEITHER GCR’S CREDIT RATINGS, NOR ITS PUBLICATIONS, COMMENT ON THE SUITABILITY OF AN INVESTMENT FOR ANY PARTICULAR INVESTOR. GCR ISSUES ITS CREDIT RATINGS AND PUBLISHES GCR’S PUBLICATIONS WITH THE EXPECTATION AND UNDERSTANDING THAT EACH INVESTOR WILL MAKE ITS OWN STUDY AND EVALUATION OF EACH SECURITY THAT IS UNDER CONSIDERATION FOR PURCHASE, HOLDING OR SALE.

Copyright 2019 GCR INFORMATION PUBLISHED BY GCR MAY NOT BE COPIED OR OTHERWISE REPRODUCED OR DISCLOSED, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT GCR’S PRIOR WRITTEN CONSENT. Credit ratings are solicited by, or on behalf of, the issuer of the instrument in respect of which the rating is issued, and GCR is compensated for the provision of these ratings. Information sources used to prepare the ratings are set out in each credit rating report and/or rating notification and include the following: parties involved in the ratings and public information. All information used to prepare the ratings is obtained by GCR from sources reasonably believed by it to be accurate and reliable. Although GCR will at all times use its best efforts and practices to ensure that the information it relies on is accurate at the time, GCR does not provide any warranty in respect of, nor is it otherwise responsible for, the accurateness of such information.GCR adopts all reasonable measures to ensure that the information it uses in assigning a credit rating is of sufficient quality and that such information is obtained from sources that GCR, acting reasonably, considers to be reliable, including, when appropriate, independent third-party sources. However, GCR cannot in every instance independently verify or validate information received in the rating process. Under no circumstances shall GCR have any liability to any person or entity for (a) any loss or damage suffered by such person or entity caused by, resulting from, or relating to, any error made by GCR, whether negligently (including gross negligence) or otherwise, or other circumstance or contingency outside the control of GCR or any of its directors, officers, employees or agents in connection with the procurement, collection, compilation, analysis, interpretation, communication, publication or delivery of any such information, or (b) any direct, indirect, special, consequential, compensatory or incidental damages whatsoever (including without limitation, lost profits) suffered by such person or entity, as a result of the use of or inability to use any such information. The ratings, financial reporting analysis, projections, and other observations, if any, constituting part of the information contained in each credit rating report and/or rating notification are, and must be construed solely as, statements of opinion and not statements of fact or recommendations to purchase, sell or hold any securities. Each user of the information contained in each credit rating report and/or rating notification must make its own study and evaluation of each security it may consider purchasing, holding or selling. NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY, TIMELINESS, COMPLETENESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY SUCH RATING OR OTHER OPINION OR INFORMATION IS GIVEN OR MADE BY GCR IN ANY FORM OR MANNER WHATSOEVER.