Fitch Ratings has assigned Rwanda's proposed senior unsecured US dollar denominated bonds a 'B+' rating.
KEY RATING DRIVERS
The rating is in line with Rwanda's Long-Term Foreign-Currency Issuer Default Rating (IDR).
Fitch affirmed Rwanda's Long-Term Foreign- and Local-Currency IDRs at 'B+' and revised the Outlook to Negative from Stable on 21 July 2021 as part of the regular review of Rwanda's ratings.
The bond's rating is sensitive to changes in Rwanda's Long-Term Foreign-Currency IDR.
RATING SENSITIVITIES
FACTORS THAT COULD, INDIVIDUALLY OR COLLECTIVELY, LEAD TO NEGATIVE RATING ACTION/DOWNGRADE:
- Public Finances: A failure to stabilise government debt at or near current levels, for example due to failure to consolidate sufficiently the public finances after the coronavirus shock or a materialisation of contingent liabilities.
- Macroeconomic Performance, Policies and Prospects: Weakening confidence that Rwanda's economic growth model will be able to return GDP growth to previous trends after the coronavirus shock, for example in the absence of policy reforms to offset a slowdown in debt-financed development.
- External Finances: A weakening of Rwanda's ability to attract long-term concessional flows, grants or foreign direct investment to finance the current account deficit, for example due to adverse political developments straining relations with donors.
FACTORS THAT COULD, INDIVIDUALLY OR COLLECTIVELY, LEAD TO POSITIVE RATING ACTION/UPGRADE:
- Public Finances: A narrowing of the fiscal deficit and a reduction or stabilisation in government debt/GDP at or near current levels after the coronavirus shock, for example through higher domestic revenue mobilisation or improved expenditure rationalisation.
- External Finances: A marked narrowing in the current account deficit and a reduction in net external debt/GDP, for example as a result of improved export performance.
- Structural Features: An improvement in GDP per capita, governance indicators or other structural factors relative to peers over the medium term.
