Latest news with #Moody'sRatings
IOL News
19-06-2025
- Business
- IOL News
Moody's warns of threat to Transnet ratings as government steps in with guarantees
This comes after the government announced on Thursday last week that it had entered a process to allocate additional guarantees to Transnet to allow the company to cover at least all debt redemptions over the next five years and enable it to fund its capital expenditure program. Image: File Moody's Ratings has warned that Transnet's ratings will remain under review for downgrade until the South African government completes the process to allocate additional guarantees by the end of July. This comes after the government announced on Thursday last week that it had entered a process to allocate additional guarantees to allow the State-owned freight and logistics company to cover at least all debt redemptions over the next five years and enable it to fund its capital expenditure program. The Minister of Transport, with the concurrence of the Minister of Finance, approved a R51 billion guarantee facility for Transnet's capital investment programme and debt obligations. The facility will enable Transnet to refinance maturing debt and ensure the organisation's continued access to adequate resources and facilities to be able to continue its operations as well as fund the capital investment programme for the foreseeable future, while also enabling Transnet to focus on operational improvements and strategic reforms. The formalized R51bn guarantee facility has been structured to cover R41bn in funding needs that Transnet expects through the end of financial year 2027, along with R10bn in guarantees for liquidity facilities. Moody's on Thursday said it viewed the significant support measures as strengthening the financial stability of Transnet. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ Ad Loading Moody's senior credit analyst Lisa Jaeger said they viewed the announcements as materially credit positive for Transnet and will monitor the outcome of the process as part of the ratings review on Transnet. 'Until the conclusion of our review, Transnet's ratings, including its long-term corporate family rating (CFR) of Ba3, and its Baseline Credit Assessment (BCA) of b3 remain under review for downgrade,' Jaeger said. 'Based on the government's most recent statement, we understand that it is working on providing at least an additional R48.6bn in guarantees, available until March 2030. This would bring the total guarantees announced in 2025 to R99.6bn, the amount needed to cover Transnet's debt maturities over the next five years.' The new guarantee facilities would be following a previous R47bn guarantee facility provided in December 2023, which has been exhausted. The R51bn guarantee facility that has already been formalized is easing Transnet's immediate liquidity pressure and will enable it to meet a R9.9bn local bond maturity in August 2025,. Jaeger said this was a payment they did not expect Transnet would be able to reliably meet without additional government support. 'While this facility does not provide a permanent solution to Transnet's ongoing liquidity challenges, we believe the announced additional guarantees would support a sustainable improvement in the company's liquidity position,' Jaeger said. 'If the government provides an additional R48.6bn in guarantees as implied by the latest announcement, the total guarantees to Transnet would increase to R150.1bn, which exceeds Transnet's total debt balance of R136bn as of September 2024. 'We expect Transnet's total debt will continue to slightly increase over the next two years, nevertheless, the company would then be able to refinance nearly its entire debt with government guarantees. We believe this will substantially reduce the company's refinancing risk and ensure it maintains an adequate liquidity profile while Transnet continues to progress with its operational turnaround plan.' Transnet falls under Moody's Government-Related Issuers (GRI) methodology given its 100% government ownership. Moody's GRI assumptions are comprised of 'Very High' default dependence with the government of South Africa and 'High' probability of extraordinary support from the government, resulting in three notches of uplift of the company's Ba3 CFR from its b3 BCA. Jaeger said Moody's rating review will focus on the sufficiency of government support measures to bring the company's capital structure and liquidity position on a sustainable footing.
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Business Standard
18-06-2025
- Business
- Business Standard
Moody's says updated climate goals may miss 2°C Paris Agreement aim
Moody's warns updated national emissions targets under NDCs may not limit global warming to under 2°C; credit risks tied to weak execution and external dependencies Puja Das Implementing updated national carbon emissions reduction goals is still likely to fall short of the Paris Agreement's objective of limiting global warming to well below 2°C above pre-industrial levels, Moody's Ratings has warned. The warning assumes significance as the latest carbon reduction goals submitted by governments ahead of the 2025 UN Climate Change Conference (COP30) in November reflect heightened ambition. Credit implications, however, will depend on the pace and rigour of implementation. Achieving absolute global emissions cuts will remain difficult. Should emissions rise following the exit of the US — the world's second-largest emitter — from the Paris Agreement, other advanced economies (AEs) would need to increase their mitigation efforts. This has not been reflected in nationally determined contributions (NDCs) to date, Moody's noted in a report on Tuesday. 'We expect that forthcoming emerging market (EM) emission reduction goals will remain more modest than AE submissions, reflecting their share of global emissions, financing obstacles, the need to address pressing social issues, support the agricultural sector and sustain industrialisation as economies grow. Even if fully implemented, it is unlikely that the updated NDCs would achieve the Paris Agreement goal of limiting global warming to well below 2.0°C,' the agency said. Over 20 countries, including major emitters like Brazil, the US, Canada, Japan and the UK — which together account for one-fifth of global emissions — have submitted updated NDCs. India, along with several other member countries, is yet to submit its third-round NDC or climate action plan to the United Nations Framework Convention on Climate Change (UNFCCC). The revised deadline is now September, ahead of COP30 in November. The UK has submitted one of the most ambitious NDCs; if implemented, it would place the country on track to achieve net-zero emissions by 2050. Other submissions have come from nations with minimal emissions but high climate vulnerability, such as Saint Lucia, the Marshall Islands and the Maldives. As national ambitions grow, more sectors will face exposure to policy, technology and demand risks stemming from the carbon transition. Moody's noted that mitigation activities outside the boundaries of national plans could also increase credit risks in some countries. India, the world's third-largest emitter, faces significant challenges in meeting its climate commitments while continuing to grow economically. On a per capita basis, India's greenhouse gas (GHG) emissions intensity is well below that of the US or China, according to European Commission data. India's overall emissions intensity had fallen by 55 per cent compared to 2005 levels as of 2023 — surpassing its 45 per cent reduction target for 2030. However, emissions could rise again due to growing middle-class demand for electricity and carbon-intensive products and services, alongside further industrialisation. Like many EMs, India's targets are conditional on receiving technological and capacity-building support from AEs, Moody's cautioned. The 2023 global stocktake found that fully implemented second-round NDCs project warming between 2.1°C and 2.8°C. The UNEP Emissions Gap Report last year warned that achieving the 1.5°C target would require up to six times the current levels of mitigation investment and a significant redirection of international climate finance to EMs. The Intergovernmental Panel on Climate Change (IPCC) in 2023 stated that, to keep the 1.5°C target within reach, global emissions must fall by 60 per cent by 2035. Few of the world's highest-emitting countries have raised their 2035 targets to above that threshold. Moody's also flagged that the conditionality of many EM NDCs on external financial, technological or capacity-building support could hinder their implementation. Additional uncertainty from geopolitical tensions affecting trade and financing may further dampen national ambitions and create new obstacles to delivery. Pointers: Credit implications will depend on the pace of implementation Updated NDCs unlikely to achieve Paris goal of staying below 2.0°C
Business Standard
16-06-2025
- Business
- Business Standard
Moody's Ratings upgrades ratings of Yes Bank 'Ba2' with 'stable' outlook
Yes Bank said that Moody's Ratings has upgraded the bank's long-term (LT) foreign currency (FC) and local currency (LC) bank deposit ratings to 'Ba2' from 'Ba3'. The agency has also upgraded the banks baseline credit assessment (BCA) to 'ba3 from 'b1. It has changed the rating outlooks to stable from positive. Moody's Ratings said that the upgrade of Yes Bank's ratings and BCA is driven by a gradual improvement in the bank's credit profile including its capital and loan loss reserves which will provide sufficient buffers against the bank's unseasoned asset risks and improving yet modest profitability and funding. Yes Bank's Ba2 deposit ratings are one notch above its ba3 BCA based on our expectation of a moderate likelihood of support from the Government of India (Baa3 stable) in times of need. The bank's gross non-performing loan (NPL) ratio declined to 1.6% as of March 2025 from 13.9% in March 2022. Reported provision coverage as a proportion of NPL increased to 80% from 71% during this period. Despite these improvements, Yes Bank's asset quality remains exposed to unseasoned risks associated with the rapid expansion in its retail and small & medium enterprise portfolios, its increased focus into higher-risk retail segments, and reliance on third-party sourcing channels. The bank's Common Equity Tier-1 (CET-1) capital ratio on a standalone basis improved to 13.5% as of the end of March 2025 from 12.2% a year earlier following the exercise of equity share warrants during the year. In May 2025 Sumitomo Mitsui Banking Corporation (SMBC) announced that it will acquire a 20% stake in Yes Bank from existing shareholders. The planned acquisition is credit positive for Yes Bank because it brings in a long-term strategic partner, with a strong balance sheet and funding capacity to support its growth. However, with a 20% stake, we expect that SMBC's influence will be limited and consequently we do not plan to factor in affiliate support in the bank's rating after completion of the transaction. The bank's efforts to reduce deposit costs and increasing lending to higher yielding, albeit higher-risk retail and small and medium enterprise segments and will help maintain its net interest margins despite the significant decline in policy rates in India over the past few months. Continued improvement in the bank's ability to meet the central bank's priority sector lending norms will also support its profitability. Yes Bank's profitability is weaker than Indian peers we rate and remains the banks' key credit challenge. The bank's funding has gradually improved with higher share of low cost current and savings deposits and retail term deposits which increased to 51% of its total deposits at the end of March 2025 from 41% as of the end of March 2021. Yes Bank is private sector bank that is headquartered in Mumbai. The bank had reported consolidated assets of Rs 4,24,100 crore as of 31 March 2025. The scrip rose 0.20% to currently trade at Rs 20.20 on the BSE.
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Business Standard
13-06-2025
- Business
- Business Standard
Moody's upgrades Yes Bank rating to Ba2 citing improved credit profile
Moody's Ratings on Friday upgraded Yes Bank's long-term foreign currency and local currency bank deposit ratings by a notch to Ba2, from Ba3, driven by a gradual improvement in the bank's credit profile. The global rating agency has upgraded its Baseline Credit Assessment (BCA) to ba3 from b1, Moody's said in a statement. The upgrade of Yes Bank's ratings and BCA is driven by a gradual improvement in the bank's credit profile including its capital and loan loss reserves, which will provide sufficient buffers against the bank's unseasoned asset risks and improving yet modest profitability and funding, it said. "Yes Bank's Ba2 deposit ratings are one notch above its Ba3 BCA based on our expectation of a moderate likelihood of support from the Government of India (Baa3 stable) in times of need," it said. The bank's gross non-performing loan (NPL) ratio declined to 1.6 per cent, as of March 2025, from 13.9 per cent in March 2022. Reported provision coverage as a proportion of NPL increased to 80 per cent from 71 per cent during this period. Despite these improvements, it said, Yes Bank's asset quality remains exposed to unseasoned risks associated with the rapid expansion in its retail and small and medium enterprise portfolios, its increased focus into higher-risk retail segments, and reliance on third-party sourcing channels.
Yahoo
11-06-2025
- Business
- Yahoo
Moody's Ratings Brings Credit Rating to Solana in Real-World Asset Tokenization Trial
Global credit rating giant Moody's Ratings and tokenization startup Alphaledger have completed a test run showing that municipal bond credit ratings can be embedded into blockchain-based securities, the companies told CoinDesk. The trial, conducted on the Solana SOL blockchain, showcases how credit ratings—typically distributed through proprietary data terminals—could be integrated into tokenized assets on public blockchains. In the proof of concept, a simulated municipal bond was tokenized using Alphaledger's platform. The bond's credit rating, provided by Moody's, was automatically submitted and attached to the token on-chain. The project used an API to move data from Moody's off-chain systems to Solana's public blockchain. For institutional investors navigating decentralized markets, the lack of standardized, trusted information remains a hurdle. By baking a known credit rating into a security token, traders and portfolio managers could hypothetically make more informed decisions about debt instruments in real time. "We've demonstrated a potential scalable model that can unlock liquidity to real world assets by providing investors access to a trusted brand like Moody's Ratings," said Alphaledger CEO Manish Dutta. The test highlights how blockchain tech could complement the existing financial plumbing, as a growing number of traditional finance giants explore ways to use crypto rails for real-world assets (RWA) like bonds, funds and credit. The process, often called tokenization, promises more efficient operations, interoperability and faster, around-the-clock settlements compared to legacy rails. It's potentially a huge market: Boston Consulting Group and Ripple projected that tokenized assets could be a $18.9 trillion market by 2033. Moody's said it will keep exploring how its ratings can serve digital finance. Future implementations could include other fixed income products such as corporate bonds. "We continue to embrace innovation in finance and actively explore new avenues for digital finance ecosystem to access our credit assessments," said Rajeev Bamra, head of strategy for digital economy at Moody's Ratings. The test also showcased Solana's capacity to handle institutional-grade financial data, adding to the network's growing RWA momentum. Last month, Solana Foundation partnered with bank-focused blockchain tech firm R3 to bring real-world assets to the network. A Securitize-issued tokenized fund of Apollo credit assets also debuted on Solana-based DeFi protocol, while Centrifuge expanded Anemoy's $400 million tokenized U.S. Treasury fund on the in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
