Johannesburg, 10 August 2021 – GCR Ratings (“GCR”) has withdrawn PSG Financial Services Limited’s (“PSGFS”) national scale long term and short term issuer ratings for business reasons. The ratings are withdrawn following the full repurchased of all outstanding perpetual preference shares on 10 August 2021. Accordingly, GCR will no longer provide ratings or analytical coverage for PSGFS.
|Rated Entity / Issue||Rating class||Rating scale||Rating||Outlook / Watch|
|PSG Financial Services Limited||Long Term Issuer||National||WD||–|
|Short Term Issuer||National||WD|
South African-based PSG Group Limited (“PSG”) is a JSE-listed investment holding company. PSGFS is a wholly owned intermediate holding company in the group’s legal structure, and the sole entity through which the group invests in underlying subsidiaries, joint ventures and associates. PSGFS’ performance and credit ratings are inherently linked to PSG, as GCR assumes a high level of transferability of funds between PSG and PSGFS.
Prior to the rating withdrawal GCR affirmed PSGFS’ national scale long term and short term issuer ratings at A+(ZA) and A1(ZA) respectively. The affirmation reflects PSGFS’ very strong funding profile and liquidity position, with no debt and a robust net cash position post the repurchase of the perpetual preference shares, providing ample resources to meet investment requirements over the short to medium term.
Moreover, PSGFS’ success in growing early-stage investments into strong companies is evidenced through its portfolio of high-quality assets, including PSG Konsult Limited (rated A+(ZA) by GCR) and Curro Holdings Limited (rated BBB+(ZA) by GCR), as well as several other public and private investments. This position is, however, offset by the relatively small portfolio size and investment concentration.
|Primary analyst||Eyal Shevel||Sector Head: Corporate Ratings|
|Johannesburg, ZA||Shevel@GCRratings.com||+27 11 784 1771|
|Committee chair||Sheri Morgan||Senior Analyst: Corporate Ratings|
|Johannesburg, ZA||Morgan@GCRratings.com||+27 11 784 1771|
Related Criteria and Research
|Criteria for the GCR Ratings Framework, May 2019|
|Criteria for Rating Investment Holding Companies, August 2019|
|GCR Ratings Scales, Symbols & Definitions, May 2019|
|GCR Country Risk Scores, July 2021|
|GCR Corporate Sector Risk Scores, April 2021|
PSG Financial Services Limited
|Rating class||Review||Rating scale||Rating class||Outlook||Date|
|Long Term Issuer||Initial||National||A-(ZA)||Stable||August 2006|
|Short Term Issuer||Initial||National||A2(ZA)|
|Long Term Issuer||Last||National||A+(ZA)||Stable||August 2021|
|Short term Issuer||Last||National||A1(ZA)|
|Debt||An obligation to repay a sum of money. More specifically, it is funds passed from a creditor to a debtor in exchange for interest and a commitment to repay the principal in full on a specified date or over a specified period.|
|Diversification||Spreading risk by constructing a portfolio that contains different exposures whose returns are relatively uncorrelated. The term also refers to companies which move into markets or products that bear little relation to ones they already operate in.|
|Issuer||The party indebted or the person making repayments for its borrowings.|
|Leverage||With regard to corporate analysis, leverage (or gearing) refers to the extent to which a company is funded by debt.|
|Liquidity||The speed at which assets can be converted to cash. It can also refer to the ability of a company to service its debt obligations due to the presence of liquid assets such as cash and its equivalents. Market liquidity refers to the ease with which a security can be bought or sold quickly and in large volumes without substantially affecting the market price.|
|Long Term Rating||See GCR Rating Scales, Symbols and Definitions.|
|Maturity||The length of time between the issue of a bond or other security and the date on which it becomes payable in full.|
|Portfolio||A collection of investments held by an individual investor or financial institution. They may include stocks, bonds, futures contracts, options, real estate investments or any item that the holder believes will retain its value.|
|Rating Outlook||See GCR Rating Scales, Symbols and Definitions.|
|Short Term Rating||See GCR Rating Scales, Symbols and Definitions.|
|Weighted Average||An average resulting from the multiplication of each component by a factor reflecting its importance or, relative size to a pool of assets or liabilities.|
SALIENT POINTS OF ACCORDED RATINGS
GCR affirms that a.) no part of the rating process 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; and c.) such ratings were an independent evaluation of the risks and merits of the rated entity, security or financial instrument.
The credit ratings have been disclosed to PSG Financial Services Limited. The ratings above were solicited by, or on behalf of, the rated entity, and therefore, GCR has been compensated for the provision of the ratings.
PSG Financial Services Limited participated in the rating process through management meetings, teleconferences and other written correspondence. Furthermore, the quality of information received was considered adequate and has been independently verified where possible. The information received from PSG Financial Services Limited and other reliable third parties to accord the credit ratings included:
- The audited financial results to 28 February 2021;
- Sum of the Parts Valuation August 2021;