When SA went to international capital markets to issue $2bn worth of dollar bonds on one of the worst trading days for emerging markets recently, it managed to place the issue successfully. But it had to pay a price that was more expensive than what investors demanded in 2017, before President Cyril Ramaphosa’s "new dawn". Global factors were a key reason. Along with other emerging markets, SA’s cost of borrowing has jumped as investors have turned cautious on emerging-markets risk. But amid the Ramaphoria, it’s easy to forget that another reason why SA pays more for its money than it did a year or two ago is that its credit rating is now split between investment grade and junk status. Moody’s still has SA on an investment-grade credit rating and affirmed this in March. But in 2017, S&P Global Ratings and Fitch downgraded SA’s rating to subinvestment grade, junk status, and in S&P’s case, the foreign currency rating — on SA’s dollar bonds — was cut to two notches below investment gr...
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