By Antigone MiltiadousEskom was in the spotlight again last month as the lights went out across South Africa. Further direct support or contingent guarantees are urgently required, but mindful of consequent ratings downgrades, South Africa is loath to provide more without a comprehensive solution. South Africa guarantees c. ZAR 350 billion of Eskom’s debt, in addition to a U.S. dollar equivalent 1 billion Eurobond. But with no recourse to the utility itself, bondholders must look to South Africa in the event of an Eskom default. The government prefers to instead act as a guarantor and leave Eskom’s debt as contingent liabilities.

Source: Forbes January 04, 2019 15:22 UTC