S&P lowers Mozambique

Standard & Poor’s said it lowered its long-term rating on Mozambique to B- and placed its B-/B long- and short-term foreign and local currency sovereign credit ratings on CreditWatch with negative implications.

“We understand that the government of Mozambique is considering restructuring a $850 million government guaranteed loan issued by a government-owned company, Empresa Mocambicana de Atum SA (Ematum; not rated). While details are pending, we view the guarantee as the government’s financial obligation under our criteria, and we expect that we would classify the restructuring as a distressed debt exchange,” S&P said in a news release.

S&P said the financial difficulties of Ematum, established in 2013, raise broader questions about Mozambique’s governance and public sector debt management.

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