Mozambique - 02

Mozambique: The Looming Threat of Default

On 23 May Fitch Ratings downgraded Mozambique’s sovereign rating from CCC to CC, indicating a shift from “substantial” to “very high” levels of credit risk, with a default probable. Fitch’s downgrade followed Minister for Finance and Economy Adriano Maleiane’s admission before the parliamentary Planning and Budget Commission on 18 May that Mozambique Asset Management (MAM) could not honor the $178mn repayment tranche due to VTB Capital on 23 May. While Maleiane also stated that MAM is in the process of renegotiating its loan, this has failed to increase confidence, making further downgrades likely.

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