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Nqaba - GCR Ratings Update
NQABA FINANCE 1 (RF) LIMITED
Registration Number 2005/040050/07
(JSE Bond Issuer Code: NQA)
(“Nqaba Finance " or the “Issuer”)
GCR Ratings Update
Noteholders are reminded of the announcement released on the Stock Exchange News Service
of the JSE Limited on 26 April 2023, advising that GCR Ratings (“GCR”) affirmed the national and
international scale issue ratings assigned to the existing Class A Notes issued by Nqaba Finance
with Stable Outlooks. It was also advised that the national and international scale issue ratings of
the existing Class B Notes were upgraded and affirmed respectively with Stable Outlooks and the
national and international scale issue ratings of the existing Class C and Class D Notes below
were upgraded with Stable Outlooks. The amendments were effective 25 April 2023. Noteholders
are advised that GCR has now published the annual surveillance credit rating report on Nqaba
Finance.
GCR highlighted the following strengths and weaknesses related to the recent credit rating
update to Nqaba Finance:
Strengths
• Payroll deduction mechanism which is viewed as mitigant to the borrower’s ability to
repay
• Longstanding institutional securitisation experience (17 years).
• The Transaction has a Redraw Facility which may be used by the Issuer to fund redraws,
further advances and re-advances in the event that there are insufficient principal
collections. The Transaction also has a Liquidity Facility to fund liquidity shortfalls (an
amount equal to the sum of items 1 to 6 in the Pre-Enforcement Priority of Payments
during the Amortisation Period less the cash available in the said Priority of Payments to
fund such expenses).
• A well-seasoned portfolio with a mid-range Weighted Average Current Loan to Value
ratio.
• Improved credit enhancement as a result of Notes amortisation.
Weaknesses
• Single employer concentration risk (minimum number of direct Eskom employees is
84%).
• Limited arrears management staff and strategy, albeit recent appointments to this
function might lead to an improvement.
Summary of updated Credit Ratings assigned by GCR to the notes:
National Scale International Outlook
Rating Scale Rating
NQ1A10 -
ZAG000077686 AAA(ZA)(sf) BB+(sf) Stable
NQ1A24 -
ZAG000143991 AAA(ZA)(sf) BB+(sf) Stable
NQ1A25 -
ZAG000144007 AAA(ZA)(sf) BB+(sf) Stable
NQ1A27 -
ZAG000151531 AAA(ZA)(sf) BB+(sf) Stable
NQ1A28 -
ZAG000159583 AAA(ZA)(sf) BB+(sf) Stable
NQ1B10 -
ZAG000077702 AAA(ZA)(sf) BB+(sf) Stable
NQ1B17 -
ZAG000126467 AAA(ZA)(sf) BB+(sf) Stable
NQ1B20 -
ZAG000151549 AAA(ZA)(sf) BB+(sf) Stable
NQ1B21 -
ZAG000159591 AAA(ZA)(sf) BB+(sf) Stable
NQ1C10 -
ZAG000077694 AA+(ZA)(sf) BB(sf) Stable
NQ1C17 -
ZAG000126459 AA+(ZA)(sf) BB(sf) Stable
NQF1D5 -
ZAG000077678 AA+(ZA)(sf) BB(sf) Stable
The full rating report is available on GCR Ratings website at
https://gcrratings.com/announcements/gcr-affirms-the-ratings-of-the-class-a-notes-and-upgrades-
ratings-of-the-class-b-c-and-d-notes-issued-by-nqaba-finance-1-rf-ltd-outlooks-stable/
For further information, please contact:
Eskom Finance Company SOC Ltd
Megawatt Park
Maxwell Drive
Sunninghill
2157
Ettienne Bester
Tel +27 11 800 5405
Email: besteret@eskom.co.za
Johannesburg
26 May 2023
Debt Sponsor
Absa Bank Limited (acting through its Corporate and Investment Bank division)
Date: 26-05-2023 11:11:00
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