Moody’s downgraded Angola’s sovereign debt risk rating from “B2” to “B3”, but changed the outlook from “Negative” to “Stable”, completing the downward review process initiated last February, the agency said in a statement issued on Friday.
Both “B2” and “B3” are the lowest long-term credit ratings assigned by Moody’s, which defines associated debts as “highly speculative” and below investment quality. The downward review was based on the increase in public debt, despite being partially covered by rising oil prices.
The outlook was increased to “Stable” a week after Angola signed a Policy Coordination Instrument with the International Monetary Fund (IMF) with no financial implications and the Standard & Poor’s agency improved the country’s rating as a result.
Moody’s notes, however, that risks remain high, with government borrowing requirements remaining at an average of 20% of gross domestic product in 2018/2019, although some planned measures, if successfully implemented, may lead to its future decline.
Last week, Fitch Ratings kept its long-term rating of Angola’s foreign debt unchanged at “B”, below investment grade, but revised the economic outlook from “Negative” to “Stable” based on higher oil prices and the adoption of a set of reforms. (macauhub)