S&P Cuts Mozambique Rating on Diminished Ability to Repay Debt
- Acceleration clauses may increase nation’s risk of default
- Donors have frozen aid and demanded more accountability
The sun sets over Maputo, Mozambique.
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S&P Global Ratings lowered Mozambique’s credit assessment to CCC from B-, citing heightened risk of default either from higher-than-expected service obligations or as a result of acceleration clauses in the government’s debt.
The Southeastern African nation last month owned up to having hidden from creditors the fact that it had guaranteed as much as $1.4 billion in loans to state-owned companies. One of the companies, Mozambique Asset Management, may have missed a May 23 deadline to repay $178 million in interest since.