Angola Downgraded To 'B-' On Rising Debt Service Costs, Weak Economic Prospects; Outlook Stable

Ratings: Foreign and Local Currency: B-/Stable/B For further details see ratings list. OVERVIEW We have lowered our expectations of Angola's pace of economic growth. The country's fiscal revenue performance is below our previous expectations and debt-service costs are rising. In addition, the banking sector is weak. Some important state banks are undergoing restructuring processes, posing contingent risks to the government. Nevertheless, liquid fiscal assets remain large relative to peer countries. We are therefore lowering our long-term foreign and local currency sovereign credit ratings on Angola to 'B-' from 'B'. We are affirming the short-term ratings at 'B'. The stable outlook reflects our view that current account deficits will remain high, but can be financed externally without significantly dragging on Angola's

...OVERVIEW We have lowered our expectations of Angola's pace of economic growth. The + country's fiscal revenue performance is below our previous expectations and debt- service costs are rising. In addition, the banking sector is weak. Some important state banks are + undergoing restructuring processes, posing contingent risks to the government. Nevertheless, liquid fiscal assets remain large relative to peer countries. We are therefore lowering our long-term foreign and local currency sovereign + credit ratings on Angola to 'B-' from 'B'. We are affirming the short-term ratings at 'B'. The stable outlook reflects our view that current account deficits will remain + high, but can be financed externally without significantly dragging on Angola's foreign exchange reserves. We also expect government liquid assets will not decrease substantially. RATING ACTION...

Ratings Action