The Moody’s Mystery Is How South Africa’s Rating Held Up So Long

For a quarter-century, South Africa has been able to count on an investment-grade rating from Moody’s Investors Service, Bloomberg News reported. Bond buyers lately may be forgiven for wondering why. Financial markets have been pricing in a downgrade for months, and the other two major rating companies have had South Africa at junk status for two years. Should Moody’s follow suit, the nation would suffer enormous financial consequences. For one, the country would lose its place in the FTSE World Government Bond Index, which requires at least one investment-grade rating from either Moody’s or S&P Global Ratings. Exiting it would spark an investor selloff and outflows of as much as $15 billion, according to Bank of New York Mellon Corp., at a time when South Africa needs portfolio investment to finance its persistent current-account deficit. Read more