JPMorgan Upgrades Eskom Bonds to Buy on Bet Rating Cuts Are Over
This article is for subscribers only.
JPMorgan Chase & Co., the biggest arranger of corporate debt this year, raised Eskom Holdings SOC Ltd.’s debt to buy, saying the South African utility’s yields are attractive and betting its rating won’t be cut further.
“The extra yield of 1.5 percent that Eskom bonds offer over and above South African government bonds, combined with our fundamental belief that the South African government will support the company in almost all circumstances, compelled us to go overweight,” JPMorgan’s Johannesburg-based team said in an e-mail today. “We do not expect further adverse rating action from the agencies in the near term and hence the timing of our upgrade.”