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Investec Limited Incorporated in the Republic of South Africa Registration number 1925/002833/06 JSE share code: INL NSX share code: IVD BSE share code: INVESTEC ISIN: ZAE000081949 |
Investec plc Incorporated in England and Wales Registration number 3633621 LSE share code: INVP JSE share code: INP ISIN: GB00B17BBQ50 |
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As part of the dual listed company structure, Investec plc and Investec Limited notify both the London Stock Exchange and the JSE Limited of matters which are required to be disclosed under the Disclosure Guidance and Transparency Rules and Listing Rules of the United Kingdom Listing Authority and/or the JSE Listing Requirements.
Accordingly, we advise of the following:
Investec Limited - Credit rating actions by Fitch Ratings
In line with the Debt Listing Requirements of the JSE Limited requiring issuers of listed debt in South Africa to notify the market in the event of amendments to the credit rating of the issuer, shareholders and noteholders are referred to the Fitch Ratings (Fitch) press release on 31 March 2020 and the rating actions taken on South African bank holding companies, including the ratings of Investec Limited.
Fitch has downgraded the Long-Term Issuer Default Ratings (IDRs) and Viability Rating (VR) of Investec Limited to 'BB' and 'bb' (from BB+ and bb+), respectively. The Outlook on the IDRs has remained Negative. Investec Limited's National Long-Term Rating was also downgraded, and the Outlook revised to Negative from Stable.
According to Fitch, the rating action is driven by Fitch's expectation of a negative impact from the coronavirus outbreak on the South African banks' operating environment and key financial metrics, notwithstanding uncertainty as to the full economic and financial market implications.
The specific rating changes for Investec Limited are as follows:
- Long-term foreign and local currency Issuer Default Ratings: Downgraded to BB (from BB+); outlook negative
- National long-term rating: Downgraded to AA-(zaf) (from AA(zaf)); outlook revised to negative (from stable)
- Viability Rating: Downgraded to bb (from bb+)
In addition, rating actions (as shown below) were also taken by Fitch and Moody's on Investec Bank Limited (100%-owned subsidiary of Investec Limited) alongside other South African banks. The South African sovereign ratings act as a ceiling whereby the ratings of South banks cannot be above that of the sovereign.
The downgrades, taken in isolation of any other matters, are expected to have an immaterial impact on Investec's risk weighted assets and therefore the impact on regulatory capital is also expected to be immaterial. In addition, the downgrades are expected to have a small impact on Investec Limited's cost of funds over time, as a result of Investec Limited being predominantly domiciled in South Africa and raising most of its deposits and funding in the closed rand system, with very little mismatch between foreign denominated funding and foreign denominated assets.
The specific rating changes for Investec Bank Limited are as follows:
Fitch |
To |
From |
Long-term foreign and local currency Issuer Default Ratings |
BB |
BB+ |
National long-term rating |
AA-(zaf) |
AA(zaf) |
Viability Rating |
bb |
bb+ |
Senior unsecured long-term rating |
BB |
BB+ |
Subordinated National long-term rating |
A(zaf) |
AA-(zaf) |
Moody's |
To |
From |
Long-term deposits (foreign and domestic) |
Ba1 |
Baa3 |
Short-term deposits (foreign and domestic) |
NP |
P-3 |
Long-term counterparty risk (foreign and domestic) |
Baa3 |
Baa2 |
Short-term counterparty risk (foreign and domestic) |
P-3 |
P-2 |
Senior unsecured (domestic) |
Ba1 |
Baa3 |
Senior unsecured MTN (foreign) |
(P)Ba1 |
(P)Baa3 |
Subordinate MTN and Tier III Debt MTN (foreign) |
(P)Ba2 |
(P)Ba1 |
Baseline credit assessment |
ba1 |
baa3 |
Investec Limited is listed on the Johannesburg Stock Exchange and houses the Investec Group's Southern African operations). Investec plc is listed on the London Stock Exchange (with a secondary listing on the Johannesburg Stock Exchange) and houses the Investec Group's non-Southern African operations). From a creditors perspective the entities (and their respective banking subsidiaries) are separately ring-fenced legal entities, which are reviewed and rated separately by Rating Agencies.
This announcement relates to Investec Limited only as required by the JSE Debt Listing Requirements.
The Fitch and Moody's press releases can be accessed at www.fitchratings.com and www.moodys.com respectively.
Johannesburg and London
2 April 2020
Sponsor:
Investec Bank Limited
