Wednesday, April 15, 2015

Ethiopia’s Credit Rating Kept at B by Fitch as Total Debt Rises

(Apr 15, 2015, (Bloomberg Business))--Ethiopia’s credit rating was kept at a “highly speculative” B by Fitch Ratings, which expects the government to meet its fiscal deficit target of 2.9 percent of gross domestic product this year. Expansion in the fiscal year that ends July 7 will probably be in the nine to 10 percent range, down from an average 10.2 percent in the past five years, the company said in a statement yesterday. Fitch confirmed its stable outlook for the country.

In a debut rating in May, Standard & Poor’s and Fitch assigned Ethiopia B, while Moody’s gave it B1. The B rating from Fitch indicates “that material default risk is present, but a limited margin of safety remains,” according to its website.

Ethiopia made its first sovereign-debt offering in December, selling $1 billion of 10-year Eurobonds with a coupon of 6.625 percent to European and American investors. The government said proceeds would be spent on infrastructure projects.

The economy grew quicker than that of any other African nation, at an average of 10.9 percent, over the past decade, boosted by spending on infrastructure, International Monetary Fund data show. Read more from Bloomberg Business »

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