Fitch downgrades Angola, bonds

Fitch Ratings said it downgraded Angola's long-term foreign and local currency issuer default ratings to B from B+.

The outlooks are negative.

The issue ratings on the country's senior unsecured foreign currency bonds were also downgraded to B from B+. The country ceiling was revised down to B from B+ and the short-term foreign and local currency issuer default ratings were affirmed at B.

Angola continues to suffer from a severe oil shock (oil accounts for over 95% of total export revenue and around 50% of government revenue), leading to a sharp worsening of macroeconomic, fiscal and external metrics, Fitch said.

Sustained pressure on the balance of payments has led the authorities to restrict foreign currency availability, creating a severe liquidity shortage.

Between January and August, the National Bank of Angola (BNA) sold only around $6 billion in the domestic market, compared with over $12 billion in the same period in 2015, contributing to a sharp widening in the parallel market.

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