S&P affirms Mozambique

S&P said it affirmed its long- and short-term foreign currency ratings on the Republic of Mozambique at SD/SD and its long- and short-term local currency sovereign credit ratings at B-/B.

The outlook remains stable.

The agency said the ratings at SD or D do not carry an outlook because they express a condition (default), and not a forward-looking opinion of default probability.

The stable outlook on the local currency rating reflects the agency’s view that metical-denominated government debt will continue to be honored.

“We do not anticipate that the Republic of Mozambique will include local currency debt in any upcoming restructuring or exchange offer on its dollar-denominated bond notes,” S&P said in a news release.

The agency said the affirmation of its SD foreign currency ratings stems from the government of Mozambique remaining in arrears on its obligation on the $727 million fixed-rate notes issued in April 2016 and maturing in 2023.

“The affirmation of our local currency ratings stems from our expectations that the Republic of Mozambique will continue to honor debt denominated in Mozambican metical and will not incorporate it into any restructuring talks,” S&P added in the release.

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