MARK BARNES: Abandon the divide between private sector business and government
Banks can take deposits at 3.3% and then on-lend that money to the government at, say, the prime rate of 7%
The current sovereign debt landscape looks like this: the 10-year RSA bond is trading at a yield of about 9%, and 20- to 30-year bonds are above 11.5%.
SA’s current credit rating (S&P) is BB-, below investment grade, SA’s five-year credit default swap quote implies a probability of sovereign default of a little over 5%. A tough place to raise money, with CPI at 3%...