Red Alert! Mozambique’s credit rating in rapid decline

mozambique debt

The problems related to restructuring the debt of tuna company Empresa Moçambicana de Atum (Ematum) have led credit rating agencies Moody’s and Standard & Poor’s to lower their rating on Mozambique, according to statements issued Tuesday.

Moody’s, for example, lowered its rating on Mozambique’s new issues of sovereign debt from “B2″ to “B3″, which means the bonds are considered high risk and noted that this rating could be lowered further.

The agency said that the decision was based on the reduced capacity of the Mozambican government to serve its own debt, which is shown by the drop in the Bank of Mozambique’s foreign reserves.

In a separate statement Moody’s lowered the credit rating on Ematum from “B2″ to “Caa2″, warning bondholders that the bonds are considered highly speculative, are in default or close to it, and that there is little chance of recovering the capital or receiving interest payments.

Standard & Poor’s lowered its rating on Mozambique by four levels from “b-” to “CC”, which means that “the issuer is currently in a highly vulnerable situation”, just two levels away from “D” or default.

The agency also warned that it could lower that rating to “selective default”, if investors receive less than promised when bonds were originally issued by Ematum.

On 9 March Mozambique announced it planned to restructure Ematum’s remaining debt through a swap of bonds maturing in 2020 with a coupon of 6.305 percent for others maturing in 2023.

source: macauhub

Clearing Agent in Mozambique | Top Website | http://www.yukonservice.com

Yukon Services Clearing Agent License Holder
Yukon Services en Maputo | Clearing Agent in Mozambique | Top Website | Biggest English Portal | http://www.yukonservice.com

 

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s