South African companies are in for a tough time if rating agencies Moody's and S&P Global Ratings downgrade the country's local currency rating to junk on Friday. But independent economist Ian Cruickshank said this week they should have been preparing for the eventuality. "Expectations are so high that we [South Africa] will get a downgrade and that it is only a question of timing," he said. He pointed to steps that property group Redefine had taken to lower risk to the business, which included securing capital it required for the next two or three years from the banking sector at a very low cost. Cruickshank said it had also taken out cover for the group's foreign exposure and secured tenants in long-term leases by offering discounts, thereby reducing the risk of tenants defaulting on leases. Vodacom this week announced that earlier this year it had increased its fixed-rate borrowings from 20% to 50% of debt, to hedge against downgrade risk. Sasol said that it had put in place a he...
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