Pretoria - Fitch Ratings has awarded state arms maker Denel an "AA" credit rating for long-term domestic debt, the company announced in a statement on Thursday.

"These ratings reflect Denel as a stable group with a very strong credit quality, which differs only slightly from the country's highest rated issuers," the statement said.

The company, presently wholly owned by the Department of Public Enterprise (DPE) on behalf of South Africans, had also instructed its ratings advisors, Investec, JP Morgan and Wipcapital to lead manage an inaugural bond issue in the domestic bond market.

"Application has been made to list on the Bond Exchange of South Africa."

The DPE was expected to have finalised the sale of a 30% equity stake to Europe's largest defence group, BAE Systems, by September.

The signing ceremony was likely to coincide with the African Aerospace and Defence show in Pretoria that month.

With acknowledgements to Sapa and www.news24.co.za