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Fitch lowers Mozambique ratings

Xinhua, May 25, 2016 Adjust font size:

Fitch ratings agency has downgraded Mozambique's long-term foreign and local currency Issuer Default Ratings (IDRs) to 'CC' from 'CCC', state media AIM reported Tuesday.

It said, in the view of Fitch, a Mozambican default is now "imminent."

The downgrade anouncement came after the revelation of 1.4 billion U.S. dollars of undisclosed government-guaranteed loans, a situation the rating gency said "has revealed significant short-term repayment obligations, which could precipitate a near-term credit event."

Fitch notes that 1.4 billion dollars was equivalent to 9.2 percent of Mozambique's GDP in 2015. The bulk of this money consists of loans to two companies effectively owned by the security services - Proindicus (622 million dollars) and Mozambique Assets Management, MAM (535 million dollars).

Finance Minister Adriano Maleiane said last month that MAM was trying to restructure its debt. So far the creditors have not been impressed, the report said. Enditem