Moody’s ups Zambia local-currency rating

Moody’s Investors Service said it raised Zambia’s local-currency long-term issuer rating to Caa3 from Ca.

“The upgrade of the local-currency rating follows the announcement of an agreement on a comprehensive debt treatment between the government of Zambia and the official creditor committee (OCC) that explicitly excludes local-currency debt from the restructuring treatment, reducing the risk of losses for local-currency creditors (including non-resident holders).

“The upgrade is limited to one-notch in recognition of the high risk of future default on local-currency debt due to very weak debt metrics, vulnerabilities to environmental risks and external shocks, as well as high social risks and very weak governance,” the agency said in a statement.

The outlook remains stable.

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