S&P Global Ratings (S&P) has revised Telkom’s outlook to positive from stable and affirmed its foreign and local currency rating of BB.
This followed S&P’s revision of South Africa’s foreign and local currency ratings to positive from stable.
“The ratings action on the sovereign came as a result of improved terms of trade which continue to support South Africa’s external sector performance,” Telkom said in an update to shareholders.
“Since the South African government owns about 40% of Telkom, S&P considers Telkom a government-related entity. The revision in Telkom’s outlook is as a result of the outlook action taken on the government.”
Telkom also passed S&P’s stress test to qualify in having its standalone credit profile (SACP) rating higher than the sovereign.
The SACP rating was affirmed at ‘bbb-‘ limited to one notch above the foreign currency rating of government.