State-owned enterprise, Land Bank, defaulted their payments, due Thursday, on two bond programmes worth approximately R50 billion.
The SOE mainly provides funding to the agricultural sector. Earlier this week, Land Bank reported that they were experiencing problems with liquidity and were coming up with plans to meet their duties.
As a result, the ratings agency, Fitch, has lowered South Africa’s credit rating. The agency further said that this default could impact the assessments of other SOEs, such as Eskom and Transnet.
In their statement, the National Treasury said assistance to the Land Bank is yet to be decided.