Fairfax company suffers rating loss

A Fairfax Africa-backed South Africa-based financial services company’s long and short-term national scale issuer rating has been downgraded by GCR Ratings.

The rating agency has dropped Grobank’s long national scale issuer rating to BB-(ZA) from  BBB-(ZA), while the short term rating has been downgraded to B(ZA), from BBB-(ZA), with a negative outlook.

Grobank is also part-owned by the Public Investment Corporation (PIC).

GCR has downgraded Grobank on increased risk to its balance sheet due to deteriorating levels of capitalisation and a less stable funding structure.

PIC and Fairfax Africa first backed Grobank in 2018, having acquired the company which was known as Bank of Athens at the time.

Bank of Athens was rebranded to Grobank in 2019, following the acquisition.

Other investors in Grobank include Norsad Finance, which injected approximately $10 million (R150 million) worth of debt into the company, earlier in 2020.

See issuer profile here