UPDATE 1-S&P raises Ethiopia’s local currency rating to ‘CCC+’, maintains foreign currency at ‘selective default’ rating

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Sept 20 (Reuters) – Global credit ratings agency S&P raised Ethiopia’s long-term local currency rating to “CCC+” on Friday, citing assumption that domestic debt will not fall under the scope of the prospective debt restructuring.

The agency, however, kept Ethiopia’s foreign currency rating at “selective default”, saying that government remains in arrears on its commercial debt obligations, including its Eurobond.

S&P cut the foreign currently rating from “CCC/C” in December last year after the Horn-of-Africa nation defaulted on a $33 million coupon payment on its $1 billion Eurobond.

The government in Addis Ababa has since secured a $3.4 billion financing deal with the International Monetary Fund, putting its protracted debt restructuring process back on track.

“Once a deal is agreed with the majority of Eurobond lenders, we could consider raising the foreign currency sovereign credit ratings from ‘SD’,” S&P said.

It also raised the sovereign’s local currency outlook to “stable” from “negative.” (Reporting by Duncan Miriri and Unnamalai L; Editing by Alan Barona)

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