Moody's Investors Service has downgraded the Government of Gabon's issuer and senior unsecured debt ratings to Caa1 from B3 and changed the outlook to stable from negative.
The rating downgrade is underpinned by continuing government arrears to creditors and suppliers which point to heightened government liquidity pressures and denote institutional weaknesses. Persistent arrears also risk delaying critical financial support from the official sector, in turn exacerbating existing liquidity pressures.
The stable rating outlook at Caa1 reflects Moody's assessment that the government's challenging fiscal and liquidity positions with arrears likely to persist are balanced by likely continued IMF financial support as the government's debt will remain sustainable according to the IMF's framework.
Concurrently, Moody's has lowered Gabon's local currency and foreign currency long-term bond and deposit ceilings to B1 from Ba3.
