Pepkor, which changed its name from Steinhoff Africa Retail in 2018 to distance itself from its embattled majority shareholder, said on Monday that Moody’s Investors Service has assigned it a low-risk credit rating.
Moody’s assigned Pepkor an A3.za rating, which is four ratings above junk status, and is considered low-risk.
The move comes as the group considers its options in the bond market for diversifying funding and reducing financing costs.
Moody’s stated that the rating reflects Pepkor’s “moderate leverage and the resilience of its business profile stemming from its leading position as SA’s largest non-grocery retailer”, the retailer said.
The group — whose brands include Pep, Ackermans, Incredible Connection and Timbercity — was a wholly owned subsidiary of Steinhoff until it was listed on the JSE in September 2017.
The group is targeting a reduction to one times net-debt to earnings before interest, taxation, depreciation and amortisation (ebitda) in the medium term.
At the end of its year to end-September, this ratio stood at 1.7 times net-debt to ebitda.
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