S&P Cuts Senegal to CC, Its Lowest Credit Rating in 26 Years
SENEGAL · MARKETS Key Facts —What happened S&P Global Ratings cut Senegal’s long-term foreign-currency rating from CCC+ to CC on September 4, the country’s lowest grade in nearly 26 years, and kept the outlook negative. —Why S&P says the government’s planned debt restructuring is highly likely to leave foreign-currency creditors with losses. —The backdrop Billions […] The post S&P Cuts Senegal to…
S&P has lowered Senegal's credit rating to CC, marking its lowest rating in nearly 26 years, due to the upcoming debt restructuring that likely will cost bondholders money. The first coupon payment deadline is set for September 13. Credit ratings range from safest to lowest, with CC being two notches above default. This downgrading indicates S&P expects Senegal to miss payments or force lenders into a deal with unfavorable terms.
The rating agency's decision stems from the government's plan to restructure debt, which was disclosed in 2024, pushing the public debt to 132% of GDP and suspending Senegal's IMF program for two years. Moody's had already cut Senegal to Caa2 on August 28, citing political risk and debt sustainability issues. The upcoming September 13 coupon payments on the euro-denominated bond (4.75% maturing 2028) and the dollar bond (6.75% maturing 2048) will test Senegal's commitment to honoring its financial obligations.
Senegal has already initiated the transfer for the dollar bond's coupon and pledges to fulfill its commitments, but bond prices have dropped to approximately half of face value, reflecting heavy expected losses. The IMF and Senegal reached a staff-level agreement on a US$2.2 billion, three-year loan program on September 1, which includes a "debt treatment," a term describing changes to the country's existing debt obligations.
Written by urgent.news from The Rio Times's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
