SANRAL’s credit rating is premised upon the substantial ongoing financial support provided by the Government of South Africa (“GoSA”). This support is provided both to cover ongoing operational requirements, as well as anticipated extraordinary requirements. GCR expects such financial support to persist, given the importance of SANRAL’s economic mandate and the guarantees issues by the GoSA to most of SANRAL’s debt, as well as the cross defaults between SANRAL debt and other Government guaranteed debt. In light of this GCR has applied the credit support floor.
SANRAL plays a critical role in the South African economy. It operates within a legislated mandate, with clear guidelines as to its responsibilities and obligations in terms of operating and maintaining national roads in South Africa. In this regard, it benefits from a close operating relationship with the Department of Transport, and does not face any competition in its sphere of obligations. Moreover, SANRAL is protected from insolvency by legislation. Furthermore, its performance is not impacted by competition or pricing related pressures, aside from the potential loss of traffic volumes on some toll roads due to general economic cyclicality.