Moody's Downgrades Senegal Credit Rating to Ca

Moody's Ratings downgraded Senegal's foreign-currency sovereign ratings to Ca from Caa2 on Thursday, marking the fifth downgrade for the nation. The agency warned that external private creditors will likely face larger losses than previously anticipated as the country undergoes planned debt restructuring.

This action follows a September announcement by the government of Senegal to seek restructuring under the G20 Common Framework. The decision came after the disclosure of previously unreported liabilities pushed the nation's public debt to approximately 97% of GDP. The government is currently in talks with the International Monetary Fund to restore debt sustainability.

Despite the ratings moving deeper into junk territory, Moody's revised the outlook to stable. The agency cited Senegal's membership in the West African Economic and Monetary Union as a mitigating factor, noting that the regional bloc helps limit currency and balance-of-payments risks while maintaining access to regional financing markets.