Senegal’s Dollar Bonds Decline After Moody’s Ratings Downgrade

(Bloomberg) — Senegal’s dollar bonds fell on Monday after Moody’s Investors Service downgraded the country’s sovereign credit ratings further into junk territory.

The West African nation’s Eurobonds are among the worst performers in emerging markets this month, with notes maturing in 2048 losing for the first time in three days by declining 0.7% to 68.94 cents on the dollar at 2:02 p.m. in London. Securities due 2033 eased by 0.8% to 79.71 cents on the dollar, while those expiring in 2031 lost 0.6% to 89.07 cents on the dollar.

Moody’s lowered the country’s long-term foreign-currency rating by two notches to B3, six levels below investment grade on Friday, citing Senegal’s weaker public finances following investigations by a court of auditors.

President Bassirou Diomaye Faye, who came to power in April 2024, commissioned an investigation into Senegal’s finances that showed the debt burden increased in each of the five years of former President Macky Sall’s final term.

Debt to gross domestic product jumped to a recalculated 99.7% in 2023 from 65.6% in 2019, Senegal’s Court of Auditors said Feb. 12. The budget deficit was estimated at 12.3% of GDP in 2023, compared with the 4.9% reported by the previous administration, according to the report.

“The downgrade is driven by the substantially weaker fiscal metrics revealed by Senegal’s court of auditors,” Moody’s said. “The scale and nature of the discrepancies significantly limit Senegal’s fiscal space and contribute to elevated funding needs, while indicating material past governance deficiencies.”

More stories like this are available on bloomberg.com