Global rating agency Moody’s on Tuesday downgraded the long-term credit rating of Botswana’s state-owned power utility, days after it also downgraded the rating of the Botswana government last week.
Moody’s Investors Service said in a statement that it had downgraded from Baa2 to Baa3 the long-term issuer rating of the Botswana Power Corporation (BPC).
An issuer rating is an assessment and opinion on a company’s overall capacity to pay its long or short-term financial obligations. It focuses on the company’s ability and willingness to meet its financial commitments on a timely basis.
Tuesday’s action on BPC comes in the wake of Moody’s downgrade of the long-term issuer rating of the Botswana government to A3 from A2 on April 23.
The rating firm said the downgrade reflected the weak credit profile of the government of Botswana, which is the sole shareholders and main financial backer for the BPC.
The downgrade is attributed to an expectation that the Botswana government would not be able to continue to provide timely financial support to BPC, which has perennially sought financial bailouts from the shareholder.
JN/APA