Moody’s downgraded Senegal’s long-term foreign-currency sovereign issuer rating and its foreign-currency senior unsecured debt rating from Caa2 to Ca on Thursday, October 29, 2026. The move came as Dakar pursued talks to restructure its external debt, with the agency expecting larger losses for international private creditors.
The downgrade is particularly relevant to investors holding Senegal’s international bonds. Moody’s also changed the outlook from negative to stable, judging that the challenges surrounding the debt treatment are partly offset by the country’s continued access to West Africa’s regional financing market.
The distinction between foreign and regional borrowing lies at the centre of Senegal’s strategy. In a September 1 statement, the Ministry of Economy and Finance announced a debt treatment plan designed to ease repayment pressures. It said CFA franc-denominated debt would remain outside the plan, reflecting the regional market’s importance in financing both the government and the wider economy.
Regional investors remain central to Dakar’s funding
Moody’s kept Senegal’s long-term local-currency sovereign rating at Caa2. The distinction matters for holders of international Eurobonds and investors in CFA franc-denominated government securities, whose exposure to the planned debt treatment is not the same.
Senegal has meanwhile continued raising funds within the regional market. Its finance ministry reported CFAF338.2 billion raised through the country’s second public securities offering of 2026, which closed on October 13 against an initial CFAF200 billion target. The operation illustrates the importance of West African investors to the government’s funding strategy.
The latest Moody’s action follows an August downgrade that had taken Senegal’s rating to Caa2. Talks with creditors and the International Monetary Fund are continuing as the authorities seek to reduce debt servicing pressures and stabilise public finances.