South Africa’s Eskom Bailout Plan Credit Negative, Says Moody’s

South Africa’s decision to more than double its financial support for Eskom Holdings SOC Ltd. 

is “credit negative” for the sovereign rating as it’s an additional drain on the budget, Moody’s Investors Service said.

While the government may try to absorb some the costs of the plan to help rescue the cash-strapped power utility in the medium-term budget in October, the “room to maneuver is extremely constrained,” Moody’s said in a report on its website. 

The rand weakened and benchmark bond yields rose for a fifth day.

• Bloomberg