S&P Cuts Senegal to CC, Its Lowest Credit Rating in 26 Years
SENEGAL · MARKETS
Key Facts
- —What happened S&P Global Ratings cut Senegal’s long-term foreign-currency rating from CCC+ to CC on September 4, the country’s lowest grade in nearly 26 years, and kept the outlook negative.
- —Why S&P says the government’s planned debt restructuring is highly likely to leave foreign-currency creditors with losses.
- —The backdrop Billions of dollars in previously undisclosed government liabilities surfaced in 2024, pushing public debt to 132% of GDP, and Moody’s cut Senegal to Caa2 on August 28.
- —The test date Interest payments fall due September 13 on two international bonds — one in euros, one in dollars. The government says it has initiated the transfers and will pay.
- —The bigger frame The cut lands a week after the IMF agreed a US$2.2 billion loan program whose fine print includes a “debt treatment” — the first step toward the restructuring S&P is now pricing in.
S&P has cut Senegal’s foreign-currency rating to CC, its lowest in nearly 26 years, judging that the debt restructuring Dakar is preparing will highly likely cost bondholders money. The first coupon deadline arrives on September 13.
What CC actually means
Credit ratings are a ladder from safest to failed. At the top sit governments that repay without question; at the bottom is D, for default. CC is the second-to-last rung before default.
In plain words, S&P is saying it expects Senegal to miss payments or to force lenders into a deal that leaves them worse off — unless something unexpected intervenes. The negative outlook means the next move, if there is one, is more likely down than up.
S&P cut the long-term foreign-currency rating from CCC+ to CC and the local-currency rating to CCC on September 4. The trigger, it said, is the government’s planned debt restructuring, which it views as highly likely to inflict losses on holders of foreign-currency bonds.
How Senegal got here
The roots go back to 2024, when the new government of President Bassirou Diomaye Faye uncovered billions of dollars in borrowing that the previous administration had never disclosed. The revelation pushed the measured public debt to 132% of GDP and froze Senegal’s IMF program for two years.
The rating agencies have been marking the country down in steps ever since. On August 28, Moody’s cut Senegal to Caa2, deep in speculative territory, and pointed to the political standoff between Faye and his former prime minister Ousmane Sonko as an added risk, as we reported at the time. S&P’s move to CC is the escalation of that same story.
A rating this low matters beyond pride. It raises the price of any future borrowing, scares off the investors who buy frontier-market debt, and can force some funds to sell Senegalese bonds automatically.
The September 13 coupon test
The first hard deadline arrives within days. Interest payments fall due on September 13 on Senegal’s euro-denominated bond paying 4.75% and maturing in 2028, and on its dollar bond paying 6.75% and maturing in 2048.
Dakar says it has already initiated the transfer for the dollar bond’s coupon and intends to honor its commitments. Bond prices firmed on that pledge, though at roughly half of face value they still reflect heavy expected losses.
Paying this coupon and restructuring later are not contradictory. Governments typically keep servicing debt while they negotiate, then fold the bonds into a deal once terms are agreed.
The restructuring behind the rating
On September 1, Senegal and the International Monetary Fund reached a staff-level agreement — a deal between technocrats that still needs the IMF board’s sign-off — on a US$2.2 billion, three-year loan program.
The IMF’s mission chief confirmed the program includes a “debt treatment,” the fund’s careful phrase for changing the terms of what Senegal owes. The finance minister insists it is “not a restructuring in the traditional sense.” Senegal has begun reworking nearly US$5 billion of international bonds under IMF supervision.
Whatever the label, S&P has now said in the clearest available terms that it expects bondholders to take losses. The next milestones are the September 13 coupons, the IMF board vote, and the reception of whatever terms Dakar finally puts to its creditors.
Frequently asked questions
What is Senegal’s new S&P rating?
CC for long-term foreign-currency debt, down from CCC+, with a negative outlook. It is Senegal’s lowest rating in nearly 26 years and sits two notches above default.
Why did S&P downgrade Senegal?
Because the government’s planned debt restructuring is highly likely to impose losses on foreign-currency creditors. The underlying problem is a debt load of 132% of GDP after hidden borrowing came to light in 2024.
What happens on September 13?
Interest payments fall due on Senegal’s 4.75% euro bond due 2028 and its 6.75% dollar bond due 2048. The government says it has initiated the transfers and will pay.
Does Senegal have an IMF program?
A staff-level agreement for a US$2.2 billion, 36-month program was reached on September 1, 2026. It still requires IMF board approval and includes a “debt treatment” plan.
What did Moody’s do?
Moody’s cut Senegal to Caa2 on August 28, 2026, citing debt sustainability and political risk. S&P’s CC cut is the next step in the same deterioration.
Sources: S&P Global Ratings action (September 4, 2026); Reuters; BusinessDay Africa Finance in Brief; Ecofin Agency.
Connected Coverage
We have also reported on the Moody’s cut that started this escalation, and on the IMF agreement that precedes the debt treatment. Both sit inside Africa: The New Scramble, our running account of the contest for the continent.
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