AS Eskom Holdings prepares to talk to investors about plans to address a multibillion-dollar debt load, the performance of the company’s bonds already suggests some skepticism from bondholders.
The yield premium of Eskom’s 2028 dollar bonds without a government guarantee over those with state backing has widened almost 50 basis points since the beginning of October to the most in four months. The state-owned electricity company has 402 billion rand ($26 billion) of debt, of which about 70% is guaranteed by the government.
Finance Minister Enoch Godongwanasaid earlier this month the power utility would seek bondholder approval for a plan to spread its debt between three new corporate entities. Rich nations have also pledged to provide billions of dollars in funding to Eskom to help South Africa reduce its dependence on coal.
The three new entities will oversee transmission, generation and distribution. A transmission company has already been established and
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