South Africa: Fitch Ratings expected to announce ratings decision today - TDS

Analysts at TDS point out that the National Treasury said in an emailed statement yesterday that Fitch Ratings is expected to announce a decision on South Africa’s ratings today.

Key Quotes

“While we ignore the nature of this announcement, we note that Fitch already downgraded to junk SA’s local-currency and foreign-currency debt ratings on 7 April 2017, also changing their outlook to Stable from Negative. We see a possibility that Fitch decide to turn the outlook to Negative again in light of the rising political uncertainty. Although another cut of SA’s ratings cannot be entirely ruled out, we note that it’s impact would be modest given these are already the lowest ratings from the main three Agencies.”

“More crucial to the performance of S. Africa’s assets will be S&P’s review scheduled for tomorrow (currently S&P rates SA’s FC debt BBB-, one notch above both junk and the FC rating at BB+). S&P holds a Negative outlook. Moody's, however, still assign SA full IG, rating it two notches above junk on both scales, but a review is pending by July given the Watch Negative established on 3 April.”