Barloworld - ratings update
6 April 2020 14:35
On 3 April 2020, as a direct consequence of the South African sovereign rating downgrade, Moody's has assigned a corporate family rating (CFR) of Ba1 to Barloworld and has withdrawn Barloworld’s long-term Baa3 issuer rating, in line with the rating agency's practice for corporates with high-yield ratings. Moody's has also downgraded the short-term rating to Not Prime from Prime-3 (P-3). Concurrently, Moody's has downgraded the long-term national scale issuer rating to Aa2.za from Aa1.za and has affirmed the short-term national scale rating of Prime-1.za. The rating outlook remains negative. Moody's reported that the downgrade to Ba1 from Baa3 reflects the fact that Barloworld is intrinsically linked to the macro environment of South Africa with close to 75% of revenue and operating profit derived in the country. The full Moody's rating report on Barloworld will be available online at https://www.barloworld.com/investors/ and further details are available on Moody's website. In our view, Barloworld's earnings potential is also positively exposed to our increasing offshore investments which provide some geographic diversification. We have a robust strategy (fix, optimize and grow) in place that is expected to deliver value in spite of the macroeconomic dynamics. As stated in the trading update issued on 30 March 2020, the Group will continue reviewing its overall portfolio in line with changing long- term global trends and will carefully consider the changes required to ensure long term sustainable value creation. Click here for original article