South Africa Has a $14 Billion Question With Looming Junk Downgrade
- Bank of America estimates outflows if debt axed from benchmark
- Ratings companies seen spurred to action after budget speech
S. Africa's Rand Slumps, Yields Soar on Borrowing Plans
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Wall Street and other global banks say it’s a question of when, not if, South Africa loses investment grade status on its local-currency ratings. The bigger question is how much damage that would cause.
Bank of America Corp. estimates there may be $14 billion of outflows if rand debt is excluded from Citigroup Inc.’s World Government Bond Index, which requires non-junk ratings from Moody’s Investors Service and S&P Global Ratings.