Standard & Poor’s kept its credit rating on Mozambique in foreign currency in the long and short term at “SD/D” and the rating in national currency in the long and short-term at “B-/B,” according to a statement reported by the international press on Friday.
The “SD” rating means that a debtor has selectively decided to default on payment of a coupon but it will make payments on other debt issues on time and the “D” rating means that a debtor has failed one or more payments.
“Maintaining the credit rating follows the downgrade to ‘SD’ on 18 January 2017, after on that day the government of Mozambique failed to pay and a coupon of US$59.8 million,” the statement said.
The coupon in question is related to a US$850 million contracted in 2013 by Mozambican tuna company Ematum, whose amortization was later the subject of a restructuring process that led to a longer repayment period at a higher rate of interest and the capital to being lowered to US$726.5 million.
The agency also reported that the outlook remains stable in local currency, “since we consider it likely that the Republic of Mozambique will continue to honour its two debts in meticais, and will not embark on a restructuring process.”
In the next few months US company Kroll is due to finish an independent audit of Mozambique’s public debt, after which there will be an assessment of its sustainability by the International Monetary Fund before the IMF and the countries and organizations in the Group of 14 resume financial support to Mozambique. (macauhub)