Proposed restructuring of Mozambique bond ‘tantamount to default’
LAGOS — Mozambique’s credit rating was cut by Standard & Poor’s (S&P) and Moody’s Investors Service because a proposed restructuring of about $700m of bonds issued by a state-owned tuna-fishing firm could be tantamount to a default, the rating agencies say.S&P lowered the country’s rating by one notch to CC, 10 levels below investment grade, the company said on Tuesday. Moody’s downgraded Mozambique shortly afterwards to B3 from B2."We could lower the foreign-currency ratings on Mozambique to ‘selective default’ if we consider the investors will receive less value than the promise of the original securities, or if we believe the offer is distressed, rather than purely opportunistic," S&P said. "Once the exchange is completed successfully, we would expect to revise the rating."Mozambique said on March 9, it wanted to switch holders of $697m of state-guaranteed notes issued by Empresa Mocambicana de Atum, or Ematum, into a new interest-only bond issued by the government and maturing i...
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