South African bonds were firmer on Monday afternoon, as the market followed the strong rand and brushed off a potential suspension in Eskom bond trades.Eskom is facing a 14-day recall on its $3.75bn loan, which could trigger a recall on Eskom’s total debt of R350bn.Negotiations were held on Monday between Eskom, the Treasury and banks to restore lending. Eskom needs to raise R20bn over the next few weeks to persuade its auditors that it is a going concern.Eskom’s perceived increased potential for default on its debt has raised concern, said Investec chief economist Annabel Bishop. "With government providing guarantees for Eskom debt, failure by the utility to roll over, or meet, its debt obligations would mean government is liable."However, SA’s public finances could not repay Eskom’s debt without issuing considerably more South African government debt, putting further downward pressure on SA’s credit ratings, Bishop said.The rand was off its previous best levels of the day, but sen...
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