Fitch Ratings keeps Mozambique’s risk assessment unchanged on “restricted default”

3 April 2018

Fitch Ratings kept Mozambique’s risk assessment unchanged at “Restricted Default” due to the government’s inability to honour debt servicing and payment of interest related to loans taken on by three state-owned companies with the State’s endorsement, according to a recent statement.

Fitch Ratings has kept Mozambique in default since November 2016, when the country failed to pay a US$727.5 million coupon on sovereign debt taken on by the Mozambican tuna company Ematum.

Since then, Mozambique has failed to pay three installments on this debt issue (Eurobonds) as well as payments on loans contracted by two public companies without informing international partners and national institutions, Fitch added.

Commenting on the meeting with creditors on 20 March in London, Fitch wrote that “although the renewed involvement with creditors is a positive development after a long hiatus, the timing and length of the debt restructuring talks is uncertain.”

The credit rating agency also said that the chances of a possible agreement with the International Monetary Fund (IMF) for resumption of financial aid “are limited,” as the international organisation “continues to require the government to disclose critical information identified in the June 2017 audit report by Kroll Associates UK on hidden debt.” (macauhub)