Standard and Poors Rating Agency has lowered its rating on Santam notes by one notch.
The downgrade was necessitated by the lowering of South Africa’s sovereign debt rating last week.
Santam Limited has therefore informed its noteholders that S&P lowered their long-term counterparty credit and financial strength ratings on Santam to ‘BBB-’ from ‘BBB’ on 7 April 2017, maintaining their negative outlook. S&P’s ratings on Santam are limited by the local currency sovereign credit rating on South Africa.
At the same time, Santam’s South African national scale rating was lowered to ‘zaAA-’from ‘zaAAA’ and the South African national scale rating on subordinated and deferrable debt issued by Santam was lowered to ‘zaA-’ from ‘zaAA-’.
Santam’s Indicative Standalone Credit Profile before taking into account the Sovereign Risk adjustment remained unchanged at “a-“.
The company said the latest rating adjustments are not expected to have a negative impact on Santam’s solvency position. The group’s economic capital coverage ratio at 31 December 2016, based on the Santam internal model, was 155%, close to the midpoint of the target range of 130% to 170%.