Transnet moves to hedge against rising borrowing costs ahead of S&P review
TRANSNET is cutting its proportion of floating-rate debt to hedge against a rise in borrowing costs in the event of a downgrade of the country’s credit rating to junk, CEO Siyabonga Gama said.The possibility of SA’s national sovereign debt rating being cut to junk by Standard & Poor’s in June is “a big concern for the country, it’s going to affect everybody”, Mr Gama said in an interview on the sidelines of the World Economic Forum on Africa conference in Kigali, Rwanda, on Wednesday. “We have spent the last couple of months trying to buttress our balance sheet against that kind of eventuality.”The state-owned transport company had increased its ratio of fixed-rate to floating-rate debt to about 80:20, from 65:35 “in the last few months”, Mr Gama said. The company has about R70.7bn of bonds, of which R5.8bn is floating-rate debt, according to data compiled by Bloomberg. It also has R73.3bn of other loans.S&P is reviewing SA’s debt rating on June 3. It rates SA’s debt BBB-, the lowes...
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