Eskom’s Borrowing Costs Fall as Investors Warm to Turnaround

A measure of Eskom Holdings SOC Ltd.’s credit risk has narrowed to the lowest in a year as investors deepen bets that South Africa’s state-owned power utility has turned a corner after years of crisis.

The extra yield investors demand to own Eskom’s 2033 rand bonds rather than South African government debt has compressed to about 90 basis points from a high of 155 in May. The gap has averaged 115 basis points over the past five years as the utility grappled with a debt burden and mismanagement that moved Goldman Sachs Group Inc. to describe it as the single biggest threat to South Africa’s economy.