GCR reviews the international scale ratings of South African rated entities

06 Jun 2018 In Rating Notifications

GCR reviews the international scale ratings of South African rated entities

Johannesburg, 06 June 2018 – Global Credit Ratings has reviewed the international scale, local currency ratings of certain South African rated entities from Financial Institutions (banks and non-banks), Corporate & Public Sector Debt, and Insurance sectors. 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 17 May 2018 followed a 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
FirstRand Bank Limited* Nov-17 BB+ Negative Jun-18 BB+ Stable
Investec Bank Limited Oct-17 BB+ Negative Jun-18 BB+ Stable
Grindrod Bank Limited Apr-18 BB- Negative Jun-18 B+ Stable
Finbond Group Limited Oct-17 B+ Negative Jun-18 B+ Stable
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 Nov-17 BB Negative Jun-18 BB Stable
Quince Capital (Proprietary) Limited Aug-17 BB- Stable Jun-18 BB- Stable
Retail Capital Proprietary Limited Mar-18 B Negative Jun-18 B Stable
Transaction Capital Limited Jun-17 BB- Negative Jun-18 BB- Stable
Trust for Urban Housing Finance (TUHF Group) Sep-17 B+ Negative Jun-18 B+ Stable
Corporates
Previous rating
Current rating
Rated entity Rating date LT ISR LC Outlook Rating date LT ISR LC Outlook
Educor Holdings Proprietary Limited Nov-17 B+ Negative Jun-18 B+ Stable
Local authorities
Previous rating
Current rating
Rated entity Rating date LT ISR LC Outlook Rating date LT ISR LC Outlook
Nkangala District Municipality Oct-17 BB- Negative June-18 BB- Stable
Insurance
Previous rating
Current rating
Rated entity Rating date CPA ISR LC Outlook Rating date CPA ISR LC Outlook
Santam Limited Jul-17 BBB- Negative Jun-18 BB+ Stable

*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
FirstRand Bank Limited* Nov-17 AA+(ZA) A1+(ZA) Stable
Investec Bank Limited Oct-17 AA(ZA) A1+(ZA) Stable
Grindrod Bank Limited Apr-18 BBB+(ZA) A2(ZA) Stable
Finbond Group Limited Oct-17 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-17 A+(ZA) A1(ZA) Stable
Quince Capital (Proprietary) Limited Aug-17 A(ZA) A1(ZA) Stable
Retail Capital Proprietary Limited Mar-18 BB(ZA) B(ZA) Positive
Transaction Capital Limited Jun-17 A-(ZA) A1-(ZA) Stable
Trust for Urban Housing Finance (TUHF Group) Sep-17 BBB(ZA) A3(ZA) Stable
Corporate
Current rating
Rated entity Rating date Long-term rating Short-term rating Outlook
Educor Holdings Proprietary Limited Nov-17 BBB-(ZA) A3(ZA) Stable
Local authorities
Current rating
Rated entity Rating date Long-term rating Short-term rating Outlook
Nkangala District Municipality Oct-17 A(ZA) A1(ZA) Stable
Insurance
Current rating
Rated entity Rating date Claims paying ability rating
Outlook
Santam Limited Jul-17 AAA(ZA)
Stable

*Unsolicited/Public information ratings.

 

ANALYTICAL CONTACTS

Financial Institutions Corporate & Public Sector Debt Insurance
     
Primary Analyst Primary Analyst Primary Analyst
Vimbai Muhwati Patricia Zvarayi Yvonne Mujuru
Analyst Senior Analyst Sector Head: Insurance Ratings
(011) 784-1771 (011) 784-1771 (011) 784-1771
.(JavaScript must be enabled to view this email address) .(JavaScript must be enabled to view this email address) .(JavaScript must be enabled to view this email address)
     
Committee Chairperson Committee Chairperson Committee Chairperson
Yohan Assous Eyal Shevel Susan Hawthorne
Sector Head: Structured Finance Ratings Sector Head: Corporate & Public Sector Debt Ratings Senior Analyst
(011) 784-1771 (011) 784-1771 (011) 784-1771
.(JavaScript must be enabled to view this email address) .(JavaScript must be enabled to view this email address) .(JavaScript must be enabled to view this email address)

 

APPLICABLE METHODOLOGIES AND RELATED RESEARCH

Market Announcement entitled, “GCR updates its mapping table for South Africa”, dated 17 May 2018

GCR’s South African Mapping Table, updated May 2018 (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 2018

GCR’s Global Criteria for Rating Short Term Insurance Companies, updated July 2017

 

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

 

 

 

 

 

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://GLOBALRATINGS.NET/UNDERSTANDINGRATINGS. IN ADDITION, RATING SCALES AND DEFINITIONS ARE AVAILABLE ON GCR’S PUBLIC WEB SITE AT WWW.GLOBALRATINGS.NET/RATINGSINFORMATION. 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 THE UNDERSTANDING RATINGS SECTION OF 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.

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