Moody’s Investor Services (Ba2, negative outlook) and S&P Global Ratings (BB-, stable outlook) will release their South Africa rating reviews on 7 May and 21 May, respectively. Fitch Ratings (BB-, negative outlook) does not provide its release dates as its analyst is based outside the European Union, but its review is due at about the same time.
There was more salt in the wounds for South Africa when Fitch announced over the weekend that they were downgrading government's credit rating another notch, this follows the announcing by Moody's a week ago that they were also downgrading the credit rating.
A lot has been said in the media over the last few weeks regarding the possibility of whether South Africa (SA) would be downgraded to “junk status” by Moody’s and thereby be forced to exit the FTSE World Government Bond Index (WGBI).
Banks, businesses, government, regulators and the broader financial services sector need to pull together like never before in a constructive partnership to help guide South Africa through what will be an extremely difficult economic period, the full scale of which is as yet unknown.
The long-awaited downgrade by Moody’s of South Africa’s long-term foreign and local currency credit ratings from Baa3 to Ba1 came on Friday, 27 March and coincided with Day 1 of government’s national “lockdown”.
Like many developing countries, the South African government relies on funding to build and maintain the infrastructure of the country. To enjoy continued access to loans (in the form of government bonds) at affordable interest rates, it’s important that we keep our credit rating healthy.
On Friday, 27 March 2020, news broke that rating agency Moody’s cut South Africa's sovereign credit rating to sub-investment grade. South Africa now has a sub-investment rating from all three major international rating agencies. What will this mean for South African bonds?
Visit the official COVID-19 government website to stay informed: sacoronavirus.co.za