Ver Angola

Economy

Standard & Poor's maintains Angolan 'rating' at CCC + with stable outlook

The financial rating agency Standard & Poor's (S&P) decided to maintain Angola's rating at CCC + level, with the prospect of Stable evolution, considering the great financing needs with the financial relief guaranteed by the creditors.

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"The outlook for a Stable Evolution balances the risks associated with large financing needs and short-term debt service requirements following the restructuring agreements reached with bilateral creditors," says Standard & Poor's in the note released tonight, in which it accounts for the maintenance of the opinion on the quality of sovereign credit in CCC +, below the level of investment recommendation.

"Low oil prices, rapid currency depreciation and high foreign debt raise concerns about Angola's debt sustainability in the medium term", analysts write, adding that, "nevertheless, debt restructuring agreements with creditors officers offer some breathing space until 2023 ".

According to the S&P criteria, these agreements, namely the one reached with China, do not constitute an event of Financial Default, or 'default', contrary to what would happen if Angola started negotiations with creditors of public debt securities (Eurobonds ).

S&P lowered Angola's rating to its current level in March last year, arguing with the pandemic's impacts, namely in terms of the expected increase in public spending to combat the spread of the virus, and also because of falling prices of oil, which had at that time a very significant effect on the country's tax revenue.

The CCC + rating is the fourth level above Financial Default ('default') and is three levels below the investment recommendation, and is generally referred to as 'junk' or 'junk' due to the issuer's vulnerabilities, which can prevent it from meeting financial obligations to creditors.

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