Ratings warned that bondholders could face wider-than-expected losses as Senegal seeks to rework billions of dollars of external debt, as it downgraded the West African nation’s credit rating. The assessor cut Senegal’s foreign-currency rating to Ca from Caa2 on Thursday.

Moody’s estimates bondholder losses could be between 35% and 65% and cautioned that for the authorities to restore debt sustainability, meaningful relief beyond liquidity-driven reprofiling will be required.

Senegal in September announced plans to rework its external debt after securing a staff-level agreement with the International Monetary Fund for a $2.2 billion program, as it seeks to regain access to international capital markets. Moody’s previous rating action on Senegal was on Aug. 28.

“Excluding local-currency debt, around one-third of central government debt, as proposed by the authorities would concentrate losses on remaining creditors, including external-private creditors,” Moody’s said. “Market pricing has indicated Ca-consistent losses since the early-September debt treatment announcement by the authorities.”Senegal is the most distressed sovereign issuer in Africa, with its sovereign risk premium over US Treasuries trading at 1,447 basis points, according to closing data from a JPMorgan Chase & Co. index.

Since the debt revamp plan was announced on Sept. 1, Senegal’s eurobonds have traded at around 50-52 cents on the dollar, briefly falling below that range this week amid an impasse that has stalled passage of a revised 2026 budget — a key step toward getting IMF board approval for a new program.