Moody's drops Ghana ratings to Ca

Moody's Investors Service said it downgraded the government of Ghana's long-term issuer and senior unsecured debt ratings to Ca from Caa2. The agency also lowered the senior unsecured MTN program ratings to (P)Ca from (P)Caa2, along with downgrading to Caa3 from Caa1 the rating of Ghana's bond enhanced by a partial guarantee from the International Development Association.

The agency also revised the outlook to stable from under review. These actions conclude the review for downgrade started on Sept. 30, the agency said.

“The Ca rating reflects Moody's expectation that private creditors will likely incur substantial losses in the restructuring of both local and foreign currencies debts planned by the government as part of its 2023 budget proposed to parliament on Nov. 24, 2022. Given Ghana's high government debt burden and the debt structure, it is likely there will be substantial losses on both categories of debt in order for the government to meaningfully improve debt sustainability,” the agency said in a press release.

The stable outlook considers the assumption that the debt restructuring will happen in coordination with creditors and under the umbrella of a funding program with the IMF versus the possibility for a less orderly form of default that could cause higher losses for private-sector creditors, the agency said.

© 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.