Moody's downgrades Senegal's foreign currency debt rating
The rating agency lowered the long-term foreign currency debt rating from Caa2 to Ca, citing expected higher losses for external private creditors.
Senegal's public debt treatment plan, which excludes local currency debt, has led Moody's to downgrade the country's long-term foreign currency debt rating from Caa2 to Ca. The agency confirmed the local currency rating at Caa2 and short-term ratings at Not-Prime, while changing the outlook from negative to stable.
Moody's explained the foreign currency downgrade by anticipating external private creditors could face losses between 35% and 65% due to the debt treatment. The local currency debt was maintained at Caa2 because it will likely be excluded from the treatment but remains exposed to liquidity risks.
The stable outlook is partly attributed to Senegal's membership in the UEMOA, which helps limit financial risks and allows continued borrowing on the regional market.