On Feb. 3, 2017, S&P Global Ratings affirmed its long- and short-term foreign currency sovereign credit ratings on the Republic of Mozambique at 'SD/D' and its long- and short-term local currency sovereign credit ratings at 'B-/B'. The outlook on our local currency rating remains stable. 'SD' ratings do not carry an outlook.
OVERVIEW
On Jan. 18, 2017, the government of Mozambique missed an interest payment on its dollar-denominated bond notes. As a result, in a research update published the same day, we lowered the foreign currency ratings on Mozambique to 'SD/D'.
We believe that restructuring talks on the notes will probably be held, and we will likely reassess the foreign currency rating on Mozambique upon completion of any restructuring. The timeline for restructuring is not yet clear to us.
We are affirming the foreign currency long-term 'SD' (selective default) and short-term 'D' ratings on Mozambique. We are also affirming the 'B-/B' long- and short-term local currency ratings on the sovereign.
The stable outlook on the local currency rating reflects our view that it is unlikely that the Republic of Mozambique will incorporate local currency debt into any debt ructuring talks, and will continue to honor Mozambican metical-denominated debt.
