SA gets a stay of execution from S&P
The country has again escaped a potentially catastrophic credit downgrade to junk — but it remains on the precipice
SA can breathe a sigh of relief after receiving something of a reprieve from credit rating agency S&P Global Ratings, thanks to its large and active fixed income market, and local authorities’ “commitment to gradual fiscal consolidation”. The agency held SA’s foreign currency sovereign credit rating at BBB-, the lowest investment-grade rating, and kept its outlook negative. S&P cut its local currency rating, however, which it had widely been expected to do. It was the only one of the three agencies that had a discrepancy between the local and foreign currency ratings. It cut it by one notch to BBB. S&P was the last of the big three agencies to make an announcement in this round of rating reviews, and was the most important as it was the only agency that had SA’s foreign currency rating one notch above junk with a negative outlook — meaning it was the most likely to downgrade SA to junk. In the lead-up to the decision, analysts were saying the decision on the foreign currency rating ...
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