LONDON (Reuters) – The premium demanded by investors to hold South African sovereign dollar bonds over U.S. Treasuries fell by six basis points on Monday after Moody’s affirmed the country’s investment grade credit rating.
The average yield spread of South African dollar bonds over U.S. Treasuries on the JPMorgan EMBI Global Diversified index fell to a five-day low of 251 basis points.
Late on Friday, ratings agency Moody’s affirmed South Africa’s debt at ‘Baa3’, the lowest rung of investment grade, and revised its credit outlook to stable from negative.
A downgrade to junk would have seen South Africa removed from key bond indices, triggering billions of dollars in outflows.
Reporting by Claire Milhench