S&P cuts Senegal rating to 'CCC+' as debt strains deepen

(Reuters) -Credit ratings agency S&P on Friday downgraded Senegal's long-term sovereign credit rating to "CCC+" from "B-", citing the precarious debt position of the West African country.

It also placed Senegal's ratings on "CreditWatch developing", signalling that it could lower them if the government is unable to refinance its upcoming commercial maturities.

"Public-sector borrowing needs for 2026 are elevated, as is the level and cost of general government debt and the starting point for the budgetary deficit, making public finances precarious," S&P said.

Senegal's finances were thrown into a crisis last year after a new government uncovered unreported debts by the previous administration, which have since ballooned to $11 billion.

The International Monetary Fund froze a $1.8 billion programme with the West African nation last year after the discovery of the hidden debts, sending Senegal's international bonds lower and sparking a series of credit downgrades.

The government and the IMF have held several rounds of talks since to resolve the debt-misreporting case, but discussions during the Fund’s mission to Dakar last week ended without agreement on a new programme.

S&P had in July cut Senegal's rating to B- and put it on a negative outlook, while Moody's downgraded Senegal to CAA1 last month.

(Reporting by Shanima A in Bengaluru and Dunacan Miriri; Editing by Tasim Zahid)

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