BUSINESS NEWS - Transnet is cutting its proportion of floating-rate debt to hedge against a rise in borrowing costs in the event of a downgrade of the country’s credit rating to junk‚ chief executive Siyabonga Gama said.

The possibility of South Africa’s national sovereign debt rating being cut to junk by Standard & Poor’s next month was “a big concern for the country‚ it’s going to affect everybody”‚ Gama said on the sidelines of the World Economic Forum on Africa in Kigali‚ Rwanda‚ on Wednesday.

“We have spent the last couple of months trying to buttress our balance sheet against that kind of eventuality.”

The state-owned transport company had increased its ratio of fixed-rate to floating-rate debt to about 80:20‚ from 65:35 in the last few months‚ he said.

The company has about R70.7-billion of bonds‚ of which R5.8-billion is floating-rate debt‚ according to data compiled by Bloomberg. It also has R73.3-billion of other loans.