Eskom remains at risk of facing a distressed exchange situation or default in the next six months despite securing South African rand (ZAR) 30 billion in short-term funding from local and international funders so far this year. We now believe there is a lower likelihood that Eskom would receive extraordinary support from the government, reflecting our view that government support for the utility over the past few months has been insufficient given that the utility's liquidity concerns persist. We are therefore downgrading Eskom to 'CCC+' and 'zaB' from 'B-' and 'zaBB-'. The negative outlook points to uncertainty regarding the extent and timeliness of government support for Eskom over the coming six months, considering the magnitude of the utility's funding deficit
