What we pay the rat­ings agen­cies

Weekend Argus (Saturday Edition) - - FRONT PAGE -

DA SHADOW Min­is­ter of Fi­nance David Maynier man­aged in Par­lia­ment this week to con­vince Fi­nance Min­is­ter Malusi Gi­gaba to de­clare the amount paid to rat­ings agen­cies S&P Global Rat­ings, Moody’s and Fitch.

Ac­cord­ing to Gi­gaba S&P was the high­est paid, fol­lowed by Moody’s and Fitch.

Gi­gaba re­vealed that the gov­ern­ment also paid a Ja­panese agency, Ja­panese Rat­ings and In­vest­ment In­for­ma­tion, for ser­vices ren­dered.

“Since April 2008 to last month, a to­tal of R81 451 873 has been paid to the rat­ings agen­cies,” Gi­gaba said.

Busi­ness Re­port re­cently in­ter­viewed Gi­gaba on the im­pact of rat­ings on the well­be­ing of South Africa. On a ques­tion whether the min­is­ter was aware of the var­i­ous le­gal cases against S&P in the US, Gi­gaba replied: “We are aware of the law­suit that is in the pub­lic do­main tied to the 2008/09 global eco­nomic cri­sis.

“The US gov­ern­ment brought a case against S&P in 2013, ar­gu­ing that the rat­ings agency de­frauded in­vestors. In 2015, S&P was fined $1.5 bil­lion (R19bn). So far South Africa has not in­sti­tuted any lit­i­ga­tion against rat­ings agen­cies.”

S&P is paid for rat­ing of long-term debt is­suances, rat­ing of short-term debt is­suances as well as rat­ing of the com­mer­cial pa­per and medium-term notes.

Moody’s is paid for an­nual and quar­terly credit sur­veil­lance and rat­ing of all non-US medium- term notes pro­grammes, rat­ings of all US medium-term notes, rat­ing of all global medium-term notes pro­grammes, rat­ing of all com­mer­cial pa­per/short-term; and rat­ing of all long-term debt is­suances and medi­umterm notes sales in all mar­kets in­clud­ing lo­cal cur­rency debt is­suances.

Fitch is paid for an­nual sur­veil­lance, rat­ing of debt is­suance; and ex­pense re­im­burse­ment for rea­son­able travel and lodg­ing ex­penses in­curred dur­ing the an­nual rat­ing mis­sion to South Africa.

Gi­gaba would not say when the Brazil, Rus­sia, In­dia, China and South Africa (Brics) Rat­ing Agency will be launched,.

Newspapers in English

Newspapers from South Africa

© PressReader. All rights reserved.