Ratings agency Moody’s Investors Service downgraded South Africa’s state-owned utility Eskom on Tuesday following the lowering of the country’s credit rating last week and said the outlook for the power company was negative.

Moody’s downgraded the long-term corporate family rating of Eskom and its zero coupon euro bonds to Ba2 from Ba1, leaving it two notches below investment grade. Eskom’s probability of default rating was also downgraded to Ba2-PD from Ba1-PD.

Moody’s downgraded South Africa’s credit rating on Friday but kept it at investment grade with a negative outlook, citing a recent cabinet reshuffle and reduced growth prospects for an economy mired in recession. [nL8N1J65Y7]

“Given Eskom’s strong linkage with the South African government and its high sensitivity to changes in the sovereign credit profile, the rating downgrades primarily reflect the one-notch downgrade of South Africa’s ratings to Baa3 negative,” Moody’s said in a statement.

“The negative outlook reflects the negative outlook on the government of South Africa,” it said.

(Reporting by Tanisha Heiberg; editing by David Clarke)