Late last week, two major international ratings agencies pronounced their verdict on South Africa's economic management - and it wasn't a particularly pretty picture they found. J. BROOKS SPECTOR takes a first look at what it may mean for the future.
Last week, Fitch and Standard and Poor's, two of the three major international ratings agencies, took a long, hard look at South Africa's economic circumstances. They weren't especially pleased by what they found, giving the country a lowered economic outlook and lowered bond ratings for South Africa respectively. Ouch.
As the Wall Street Journal reported on the decisions, "Standard & Poor's Ratings Services cut South Africa's foreign and rand-denominated debt ratings by one notch each, to BBB- and BBB+, respectively, putting the country just above so-called junk-bond status. Meanwhile, Fitch Ratings cut its outlook for the country to negative, a move that indicates the rating firm could be leaning toward a downgrade of the country's debt later this year. Fitch rates South Africa's foreign-currency debt BBB, on par with S&P before Friday's cut. Moody's Investors Service, the third major ratings company, still maintains a Baa 1, several notches above junk grade." Previously, all three rating agencies had last downgraded...