Standard & Poor’s Ratings Services has assigned its ‘A-‘ local currency senior unsecured debt rating to the Development Bank of Southern Africa Ltd’s (DBSA) R1.5bn (US$0.2bn) bond maturing in 2023.
DBSA is the South African government’s primary vehicle for promoting infrastructure development in
Last year, Standard & Poor’s revised the outlook on DBSA to positive from stable, reflecting the revision of its outlook on the Republic of South Africa (local currency A-/Positive/A-2; foreign currency BBB-/Positive/A-3), the bank’s sole shareholder.
The ratings on DBSA incorporate strong support from the South African government. In addition, DBSA’s asset quality compares favourably with that of other development finance institutions and its lending policies remain cautious. “Despite a difficult operating environment, non-performing loans, estimated at 7% of gross loans at fiscal year-end 2001-02, have been kept at a manageable level and are more than fully provisioned,” said Standard & Poor’s credit analyst Mary Nnachi.
“Going forward, we expect that DBSA will maintain its sound financial profile, prudent management, and strong public policy role,” added Ms. Nnachi. “Moreover, not only will the bank continue to play a major role in South Africa’s development policies, ensuring continued government support, but the bank’s contribution toward achieving development objectives for the African region as a whole is also likely to grow over time.”