Moody's upgrades Zambia to Caa1 and keeps outlook positive

what happened

Moody's Ratings has raised Zambia's credit rating to Caa1 and kept its outlook positive, according to Reuters. The agency says the improvement in the government's debt path has been material and has lasted.

Moody's also sees a growing likelihood that debt and interest burdens and external buffers will keep improving. Combined with lower refinancing needs, it expects this to substantially reduce the government's financing requirements.

why it matters

For markets, this signals a lower risk of default on Zambia's sovereign debt. The positive outlook suggests the agency sees room for further gains, which matters for investors in emerging-market bonds.

market impact

Zambia bonds: lower assessed default risk supports demand for the country's debt

• ▲Zambia sovereign bonds pressure up — lower perceived default risk after the rating upgrade

tags

instruments