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

Zambia’s finance minister claimed creditors have been at least partly to blame for the region

Zambia’s finance minister claimed creditors have been at least partly to blame for the region defaulting on 1 of its eurobonds previous 7 days, when a team of bondholders claimed the missed payment risked environment a additional adversarial backdrop for financial debt negotiations.

The southern African country became the continent’s initial pandemic-era sovereign default, immediately after holders of the financial debt refused to grant it a 6-thirty day period fascination payment freeze on Friday.

The bondholders demanded additional info on Zambia’s money owed to Chinese loan providers, but would not sign the vital confidentiality agreements, Bwalya Ng’andu claimed.

Zambia missed a $forty two.5m (£32.3m) fascination payment on $1bn well worth of eurobonds maturing in 2024. The default was unavoidable for the reason that the region, which had obtained some financial debt relief from the China Improvement Lender, had to treat all creditors similarly and had previously created up arrears on other financial loans, Mr Ng’andu claimed.

The country’s $1bn in eurobonds, due 2024, fell one.8pc to forty four cents on the greenback in London. The non-payment has triggered cross-default provisions in all the excellent greenback bonds.

The bondholders committee, whose fifteen members symbolize in combination additional than 40pc of Zambia’s $3bn in excellent Eurobonds, claimed on Monday that buyers had been unable to consent to a financial debt standstill for the reason that they under no circumstances obtained info they necessary for an informed conclusion.

That incorporates facts on Zambia’s “policy trajectory” and fiscal framework, and transparency on how the authorities intends to deal with other creditors.

There had been no immediate discussions concerning bondholders and the authorities to date, the committee claimed.