S&P lowers Ghana

S&P said it lowered its ratings for Ghana’s local-currency sovereign rating to SD, selective default, from CCC+ and the foreign-currency sovereign rating to CC from CCC+.

“We lowered our LC long-term rating on Ghana to SD following the Ministry of Finance's offer of a domestic debt restructuring, with the objective of lowering interest costs and back-loading refinancing requirements. We view Ghana's debt restructuring as distressed rather than opportunistic due to the government's weak market access and the very high level and cost of debt in LC terms,” S&P said in a press release.

The finance ministry’s announcement that it plans to restructure its foreign-currency debt, although it has yet to launch an exchange offer, triggered the downgrade to CC. The agency warned it would view the restructuring as a distressed debt exchange.

The outlook is negative.

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