S&P Unexpectedly Cuts Outlook on S. Africa’s Junk-Rated Debt
- S&P rates country’s debt three notches below investment grade
- Outlook change due to power cuts, slow pace of reforms
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S&P Global Ratings unexpectedly lowered its outlook on South Africa’s junk-rated debt to stable from positive, as rolling blackouts set back the country’s efforts to regain an investment-grade rating.
The company revised the outlook while affirming the nation’s long-term foreign-currency rating at BB-, three notches below investment grade, according to a statement late Thursday. Its first South Africa sovereign credit rating action of 2023 had been expected May 19 and the deviation is due to “the impact of persistent electricity shortages and infrastructure constraints on economic growth,” it said.