Moody’s downgrades Egypt's rating from B3 to Caa1, with stable outlook

CAIRO – 6 October 2023:  Moody's Rating Agency (Moody’s) downgrades Egypt's rating from B3 to Caa1, with a stable outlook.

Moody's attributed the downgrade to the deterioration of the country's ability to bear debt and the ongoing shortage of foreign currencies.

Moody's said that the stable outlook is due to Egypt's continued access to financial support from the International Monetary Fund under an arrangement of $3 billion over a period of 46 months.

Last May, Moody’s placed Egypt's B3 long term foreign-currency and local-currency issuer ratings on review for downgrade. Before this rating action, Egypt's ratings were B3 and the outlook was stable.

“The review period will focus on the government's ability to finalize the targeted $2 billion in asset sales necessary to meet the IMF program's financing targets for fiscal 2023 (ending June) and demonstrate the viability of the program's external funding strategy that relies significantly on asset sales,” the statement issued by Moody’s read.

The rating agency is also placing the review on the (P) B3 senior unsecured MTN program rating of the Egyptian Financial Corporation for Sovereign Taskeek, Sukuk Company, and its B3 senior unsecured rating.