Bank of America expects SA’s credit risk to widen
US banking group cites GNU tensions and high government debt as reasons for bad omen
24 March 2025 - 05:00
The Bank of America expects SA’s perceived credit risk to widen, saying tensions within the government of national unity (GNU) and high government debt might see a 20 basis point (bps) widening in asset swap spreads — a bad omen for outflows in the bond market.
The lender said the recent budget left the planned sizes of fixed-rate bonds unchanged and this should support ASW spreads [the difference between the bond’s yield and the corresponding swap rate, which effectively measures the credit risk of the bond.]..
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