Fitch Ratings keeps Mozambique’s credit rating at “junk” level

25 July 2016

Fitch Ratings kept its “CC” rating on Mozambique’s long term credit in local currency and the short term rating in foreign currency at “C”, which means the country’s debt is not considered to be investment quality, the agency said.

In a statement issued on Friday, Fitch said it had also given a new rating of “C” on short term debt in local currency, which is also not investment level or “junk”.

The agency said neither of the two factors for the improvement of the credit rating are currently in place. These are indicators of strong public finances from foreign sources and previous preferential treatment of local investors in relation to foreign investors.

The “CC” credit rating means, according to the table prepared by Fitch Ratings, the debt issued presents a very high risk and the “C” rating that the issuer is expected to default on payment or is negotiating new terms with creditors.

Last week, the spokesman for Lazard Ltd. announced that the company had been hired by the government of Mozambique as a financial advisor to value its foreign debt and the Mozambican Minister of Economy and Finance, Adriano Maleiane, hired White & Case LLP as legal consultant to value foreign debt. (macauhub/MZ)