Moody's Investors Service has downgraded the long-term issuer and senior unsecured debt ratings of the government of Gabon to B3 from B1 and maintained the negative outlook.

Concurrently, Moody's has lowered the government of Gabon's local currency as well as foreign currency bond and deposit ceilings to Ba3 from Ba1. The rating downgrade drove the change in ceilings.

RATINGS RATIONALE

The key drivers behind the downgrade to B3 are:

1) Deteriorating public finances due to persistently low oil prices and limited policy adjustment capacity

2) Acute government liquidity pressures, as exhibited by the accumulation of arrears

The negative outlook reflects uncertainties regarding the government's strategy to refinance maturing debt and fund its deficit despite support from official creditors, which remains conditional.

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