Moody's downgrades two South African development institutions to Baa1.

By bne IntelliNews October 5, 2012
Moody's Investors Service said it has lowered the foreign-currency long-term issuer ratings of South Africa's two rated development finance institutions, Development Bank of Southern Africa (DBSA) and Industrial Development Corporation of South Africa (IDC) to Baa1 from A3 in line with the countrys sovereign rating downgrade last week. The agency considers that government support for the two development finance institutions is very high, given their development mandates and their strategic importance in terms of policy implementation, their support of institutional and industrial capacity development, and their full government ownership with no intention to privatise. It maintained its negative outlook on both institutions in line with the outlook on South Africa's government bond rating. Moodys said that the ratings would be downgraded further if its sees signs of a weakening of the South African authorities' willingness or capacity to support either DBSA or IDC. The agency sees no likelihood of rating upgrades over the near-term.

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