Moody’s cuts Senegal’s credit rating to “Ca”
By the AFREEQUE newsroom, based on Club of Mozambique
Moody’s has cut Senegal’s foreign-currency credit rating to “Ca” from “Caa2” and says foreign private creditors could face greater losses in the debt restructuring. The agency has set a stable outlook, after the disclosure of unreported liabilities that brought public debt to about 97% of GDP, according to Moody’s.
Moody’s downgraded Senegal’s foreign-currency sovereign credit rating to “Ca” from “Caa2” on Thursday and changed the outlook from negative to stable. The agency believes foreign private creditors could face greater losses than expected in the restructuring of Senegal’s debt, Reuters reports.
This is the country’s fifth consecutive downgrade and its second in less than two months. Senegal announced in September that it intended to restructure its debt under the G20 Common Framework, after previously undisclosed liabilities were revealed, bringing public debt to about 97% of gross domestic product.
Moody’s considers the risks surrounding the process to be balanced between possible delays to the restructuring and the benefits of Senegal’s membership of the West African Economic and Monetary Union (WAEMU). According to the agency, the union helps limit foreign exchange and balance-of-payments risks while maintaining the country’s access to regional financing.
