Zambia blames creditors after Africa’s first pandemic-era default

Truman Slate

Zambia’s finance minister stated lenders were being at the very least partly to blame for the nation defaulting on just one of its eurobonds previous 7 days, whilst a team of bondholders stated the missed payment risked location a more adversarial backdrop for personal debt negotiations.

The southern African nation turned the continent’s to start with pandemic-era sovereign default, soon after holders of the personal debt refused to grant it a six-month interest payment freeze on Friday.

The bondholders demanded more information and facts on Zambia’s debts to Chinese loan companies, but would not indication the needed confidentiality agreements, Bwalya Ng’andu stated.

Zambia missed a $42.5m (£32.3m) interest payment on $1bn well worth of eurobonds maturing in 2024. The default was unavoidable because the nation, which experienced gained some personal debt reduction from the China Development Bank, experienced to treat all lenders similarly and experienced now constructed up arrears on other financial loans, Mr Ng’andu stated.

The country’s $1bn in eurobonds, owing 2024, fell one.8pc to 44 cents on the dollar in London. The non-payment has activated cross-default provisions in all the fantastic dollar bonds.

The bondholders committee, whose 15 members characterize in aggregate more than 40pc of Zambia’s $3bn in fantastic Eurobonds, stated on Monday that investors experienced been unable to consent to a personal debt standstill because they hardly ever gained information and facts they wanted for an informed choice.

That features aspects on Zambia’s “policy trajectory” and fiscal framework, and transparency on how the governing administration intends to offer with other lenders.

There experienced been no direct discussions in between bondholders and the authorities to day, the committee stated.

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