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No doubt S&P downgrade will impact consumers - credit bureau

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Cape Town - The S&P downgrade of SA's foreign currency debt to junk status is no doubt going to impact consumers, businesses and government, cautioned Jacobus Eksteen, senior data analyst at credit bureau Compuscan.
 
"The question is, to what extent? Companies, especially parastatals, will be seen as having higher implied risk. Therefore, it will be more difficult to issue debt in the sense that there will be less demand and the demand will be at higher interest rates," explained Eksteen.

"Institutions buying the debt will also know that they will have to take on more risk, which makes the higher interest rates less attractive."

He said it is ultimately a negative sum game for South Africa, as "someone" loses.

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