Ivory Coast’s eurobonds experienced a surge in value following an upward revision of the nation’s credit score by Moody’s Investors Service.
The credit agency noted the country’s economic resilience and the growing influence of private sector investments as key factors behind the rating upgrade.
Credit Score Revised
Moody’s Investors Service raised Ivory Coast’s credit rating by one level, elevating it to Ba2. Although this places the country two levels below investment grade, it signifies a significant improvement in investor confidence.
The upgrade brings Ivory Coast on par with South Africa, positioning it as one of the highest-rated sovereigns in sub-Saharan Africa, alongside Botswana.
Moody’s attributed the credit score boost to the resilience of Ivory Coast’s economy.
The private sector has contributed to growth and the agency forecasts that the $70 billion economy will expand by 7% until 2026, primarily fueled by private sector investments.
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Foreign direct investment into Ivory Coast rose by 15% in 2022, outperforming neighboring Nigeria.
Fiscal Consolidation and Debt Management
The credit assessor acknowledged the government’s commitment to fiscal consolidation. Ivory Coast’s current program with the International Monetary Fund (IMF) has contributed to this positive trend.
Effective debt management practices have also amplified investor confidence.
Market Response
Yields on all of Ivory Coast’s dollar-denominated bonds declined, reflecting increased investor appetite. The yield on debt maturing in 2028 dropped significantly, marking the largest one-day decrease in nearly a month.
This trend follows a pattern of falling yields since the country’s dollar debt reached record highs in April 2022.
The outlook for Ivory Coast’s credit rating has been revised from positive to stable, indicating a favorable trajectory.
Fitch Ratings and S&P Global Ratings, while slightly more conservative than Moody’s, still view Ivory Coast’s creditworthiness positively.
