South Africa dollar bond yield spread falls 6 bps after Moody’s reprieve

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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

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Godwin Okafor is a Financial Journalist, Internet Social Entrepreneur and Founder of Naija247news Media Limited. He has over 16 years experience in financial journalism. His experience cuts across traditional and digital media. He started his journalism career at Business Day, Nigeria and founded Naija247news Media in 2010. Godwin holds a Bachelors degree in Industrial Relations and Personnel Management from the Lagos State University, Ojo, Lagos. He is an alumni of Lagos Business School and a Fellow of the University of Pennsylvania (Wharton Seminar for Business Journalists). Over the years, he has won a number of journalism awards. Godwin is the chairman of Emmerich Resources Limited, the publisher of Naija247news.

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