S&P downgrades Senegal's rating to CC, citing loss risk in debt restructuring
MacroDigital Finance
S&P downgraded Senegal's long-term foreign currency rating to 'CC' from 'CCC+' on Thursday, citing the high likelihood of losses for foreign currency creditors due to the government's planned debt restructuring. Senegal's finances have been under pressure since the discovery in 2024 of billions of dollars in debt that had not been recorded under the previous administration. The International Monetary Fund (IMF) announced on Monday that it had reached a staff-level agreement with Senegal on a three-year loan package worth about $2.2 billion. In its report, S&P noted that ongoing debt renegotiations could result in foreign currency creditors receiving less than originally promised, through principal reductions or interest rate cuts, and considers it highly likely that a distressed exchange or default on foreign currency commercial debt will occur. S&P also downgraded the local currency rating to 'CCC' from 'CCC+' on the same day, marking the second downgrade this year, with the outlook maintained at 'negative'.
