Announcements

Global Credit Ratings updates mapping tables; takes rating action on several issuers/companies

Johannesburg, 22 Jul 2014 – Global Credit Ratings (“GCR”) has revised the ratings and outlook of several issuers/companies, following a recalibration of the mapping tables used for issuers/companies rated in South Africa.

RATING RATIONALE

The updated mapping tables follow a change in internal criteria, prompted by a revision of the Republic of South Africa’s sovereign rating outlook (from ‘stable’ to ‘negative’). That notwithstanding, the national scale ratings, and associated outlooks, of the Republic of South Africa were left unchanged.

It should be noted though, that the rating actions do not reflect a change in the fundamental credit quality of the issuers/ companies listed below. Further, the rating actions can be divided firstly into the equalisation of individual issuer/company ratings where the natural rating linkages were broken as a result of the updated mapping tables, and secondly a blanket revision of the outlook on all issuer/company international (local currency) ratings, following the parallel sovereign change.

Similar to the sovereign, the domestic ratings, and associated outlooks, of the issuers/companies below remain mostly unaffected by the review of the sovereign and their own international (local currency) rating outlooks (relative ranking was unchanged).

GCR will continue to monitor developments related to the sovereign and will respond to any impact on criteria and ratings.

The following rating actions were taken related to issuers/companies’ international (long-term or “LT”) ratings and outlooks:

Ratings List Long-term International Scale, Local Currency Rating and Outlook
Banking Groups Last Rating Previous LT Rating Previous Outlook New LT Rating New Outlook
ABSA Bank Limited* 04/2014 BBB+ Stable BBB+ Negative
The Standard Bank of South Africa Limited* 05/2014 BBB+ Stable BBB+ Negative
FirstRand Bank Limited* 11/2013 BBB Stable BBB Negative
Nedbank Limited* 05/2014 BBB Stable BBB Negative
Nedbank Group Limited* 05/2014 BBB Stable BBB Negative
FirstRand (Group) Limited* 11/2013 BBB Stable BBB Negative
Investec Bank Limited 10/2013 BBB Stable BBB Negative
Bank Windhoek Limited 11/2013 BBB- Stable BBB- Stable
African Bank Limited* 06/2014 BB+ Negative BB+ Negative
Sasfin Holdings Limited* 06/2014 BB+ Stable BB+ Negative
Finbond Group Limited 10/2013 BB- Stable BB Negative
Other Finance Companies
National Housing Finance Corporation Soc Limited 11/2013 BBB Stable BBB Negative
Quince Capital (Proprietary) Limited 08/2013 BBB- Stable BBB- Negative
Real People Investment Holdings Limited 06/2014 BB Negative BB+ Negative
Trust for Urban Housing Finance 09/2013 BB Stable BB Negative
* Public Information/Unsolicited Ratings

The following rating actions were taken related to issuers/companies’ domestic (LT) ratings and outlooks:

Ratings List Long-term National Scale Rating and Outlook
Banking Groups Last Rating Previous LT Rating Previous Outlook New LT Rating New Outlook
ABSA Bank Limited* 04/2014 AA+(ZA) Stable AA+(ZA) Stable
The Standard Bank of South Africa Limited* 05/2014 AA+(ZA) Stable AA+(ZA) Stable
FirstRand Bank Limited* 11/2013 AA(ZA) Stable AA(ZA) Stable
Nedbank Limited* 05/2014 AA(ZA) Stable AA(ZA) Stable
Nedbank Group Limited* 05/2014 AA(ZA) Stable AA(ZA) Stable
FirstRand (Group) Limited* 11/2013 AA-(ZA) Stable AA-(ZA) Stable
Investec Bank Limited 10/2013 AA-(ZA) Stable AA-(ZA) Stable
Bank Windhoek Limited 11/2013 A-(ZA) Stable A(ZA) Stable
African Bank Limited* 06/2014 A-(ZA) Negative A-(ZA) Negative
Sasfin Holdings Limited* 06/2014 BBB+(ZA) Stable BBB+(ZA) Stable
Finbond Group Limited 10/2013 BB+(ZA) Stable BB+(ZA) Stable
Other Finance Companies
National Housing Finance Corporation Soc Limited 11/2013 AA-(ZA) Stable AA-(ZA) Stable
Quince Capital (Proprietary) Limited 08/2013 A+(ZA) Stable A+(ZA) Stable
Real People Investment Holdings Limited 06/2014 BBB(ZA) Negative BBB(ZA) Negative
Trust for Urban Housing Finance 09/2013 BBB-(ZA) Stable BBB-(ZA) Stable
* Public Information/Unsolicited Ratings

No rating actions were taken related to issuers/companies’ domestic (short-term or “ST”) ratings and outlooks:

Ratings List Short-term National Scale Rating and Outlook
Banking Groups Last Rating Previous ST Rating Previous Outlook New ST Rating New Outlook
ABSA Bank Limited* 04/2014 A1+(ZA) Stable A1+(ZA) Stable
The Standard Bank of South Africa Limited* 05/2014 A1+(ZA) Stable A1+(ZA) Stable
FirstRand Bank Limited* 11/2013 A1+(ZA) Stable A1+(ZA) Stable
Nedbank Limited* 05/2014 A1+(ZA) Stable A1+(ZA) Stable
Nedbank Group Limited* 05/2014 A1+(ZA) Stable A1+(ZA) Stable
Investec Bank Limited 10/2013 A1+(ZA) Stable A1+(ZA) Stable
African Bank Limited* 06/2014 A2(ZA) Negative A2(ZA) Negative
Sasfin Holdings Limited* 06/2014 A2(ZA) Stable A2(ZA) Stable
Finbond Group Limited 10/2013 A3(ZA) Stable A3(ZA) Stable
Other Finance Companies
National Housing Finance Corporation Soc Limited 11/2013 A1+(ZA) Stable A1+(ZA) Stable
Quince Capital (Proprietary) Limited 08/2013 A1(ZA) Stable A1(ZA) Stable
Real People Investment Holdings Limited 06/2014 A2(ZA) Negative A2(ZA) Negative
Trust for Urban Housing Finance 09/2013 A3(ZA) Stable A3(ZA) Stable

ANALYTICAL CONTACTS

Primary Analyst
Dirk Greeff
Head: Financial Institution Ratings
(011) 784 – 1771
dgreeff@globalratings.net

Committee Chairperson
Marc Chadwick
Head: Insurance Ratings
(011) 784 – 1771
chadwick@globalratings.net

APPLICABLE METHODOLOGIES AND RELATED RESEARCH

GCR’s Global Criteria for Rating Banks and Other Financial Institutions (updated April 2014)
GCR’s South African Mapping Tables (updated July 2014)

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 rating/s has been disclosed to the issuers/companies listed above with no contestation.

The ratings above are a mix of both solicited and unsolicited ratings, and therefore, in some instances, GCR has been compensated for the provision of the ratings, while in others it was not and the ratings are provided as public information.

GLOSSARY OF TERMS/ACRONYMS USED IN THIS ANNOUNCEMENT

Credit Rating Agency

A party that provides an opinion on the credit quality of assets, debt securities and companies.

Credit Risk

Risk that a party to a contractual agreement or transaction will be unable to meet their obligations or will default on commitments. Credit risk can be associated with almost any transaction or instrument such as swaps, repos, Ds, foreign exchange transactions, etc. Specific types of credit risk include sovereign risk, country risk, legal or force.

Default

Failure to make loan payments on a timely basis or to comply with other terms/requirements as stipulated in the loan agreement.

Financial Institution

An entity that focuses on dealing with financial transactions, such as investments, loans and deposits.

Liquidity Risk

Liquidity risk is the ability to fund increases in assets and meet obligations as they become due, without incurring unacceptable losses.

Rating Outlook

A rating outlook indicates the potential direction of a rating over the medium term, typically a one to two year period.

Sovereign Risk

The risk of default by the government of the country on its obligations.

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