Fitch downgrades Mozambique

Fitch Ratings said it downgraded Mozambique's long-term foreign and local currency issuer default ratings to CCC from B, country ceiling to B- from B and short-term issuer default rating to C from B.

Fitch said Mozambique's public debt profile has deteriorated sharply following the disclosure of additional state-guaranteed debt, which had previously been excluded from official statistics.

The terms of the loans are yet to be fully disclosed, including the extent to which cross-default clauses could precipitate a credit event. However, it is certain that their commercial nature will lead to a worsening of the country's debt-servicing schedule and sustainability, which until recently Fitch considered favorable given the large share of concessional lending.

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