Moody’s downgrades Nigeria to B1

Moody's Investors Service said it downgraded Nigeria's long-term issuer ratings to B1 from Ba3 and assigned a stable outlook, concluding the review for downgrade initiated on March 4.

Moody’s said the key drivers of the action are: (a) Increased external vulnerability brought about by the prospect of lower-for-longer oil prices; (b) execution risk in the transition to a less oil-dependent federal budget, and the implications for the government's balance sheet should it not achieve its aims; and (c) an elevated interest burden over the next two years while the government grows its non-oil tax receipts.

The stable outlook reflects the fact that Nigeria's credit fundamentals will continue to compare favorably with peers at the B1 level, despite the likely further deterioration in the country's credit metrics due to the oil price shock.

Concurrently, Moody's lowered Nigeria's long-term foreign-currency bond ceiling to Ba3 from Ba2, long-term foreign-currency deposit ceiling to B2 from B1 and the long-term local-currency bond and deposit ceilings to Ba1 from Baa3.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.