The credit ratings downgrade of SA’s sovereign debt to subinvestment grade will have a "material impact" on the ability of state-owned enterprises (SOEs) to raise funding, Public Enterprises Department officials said on Wednesday. In a briefing to the portfolio committee on public enterprises, the officials said the downgrade had the potential to increase the cost of borrowing. The officials said the department had undertaken a preliminary assessment of the effect of the downgrade on the credit spread of state-owned enterprises. "The department will develop an appropriate response plan that will strengthen investor confidence in the financial position of state-owned companies, in particular Eskom and Transnet," the department said in its presentation. Particular attention will be given to factors that contribute to the cost structure of the state-owned enterprises. These included the management of primary energy costs, in relation to which new contracting options would be explored. ...

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