On Aug. 2, 2016, S&P Global Ratings lowered its long- and short-term foreign currency sovereign credit ratings on the Republic of Congo to 'SD/D' from 'B-/B'. At the same time, we affirmed the local currency 'B-/B' ratings, on which the outlook remains stable.
OVERVIEW
On June 30, 2016, the Republic of Congo failed to make a principal and interest payment on its $478 million notes due 2029 (not rated), which were issued under a restructuring of London Club debt in 2007. The notes provide for a 30-day grace period for payment.
On July 30, the grace period expired with bondholders not receiving their payment.
We are therefore lowering our long- and short-term foreign currency sovereign credit ratings on the Republic of Congo to 'SD/D' (selective default) from 'B-/B', indicating that the Republic of Congo has defaulted on some of its foreign currency obligations.
If and when the Republic of Congo cures the payment default on the notes, we will revise our ratings on the sovereign depending on our assessment of residual litigation risk, access to international debt markets, and the sovereign's overall credit profile.
