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

Zambia’s finance minister reported collectors had been at least partly to blame for the place defaulting on one of its eurobonds previous 7 days, while a team of bondholders reported the skipped payment risked location a more adversarial backdrop for debt negotiations.

The southern African country turned the continent’s first pandemic-era sovereign default, immediately after holders of the debt refused to grant it a six-thirty day period curiosity payment freeze on Friday.

The bondholders demanded more facts on Zambia’s money owed to Chinese lenders, but would not sign the essential confidentiality agreements, Bwalya Ng’andu reported.

Zambia skipped a $forty two.5m (£32.3m) curiosity payment on $1bn well worth of eurobonds maturing in 2024. The default was unavoidable due to the fact the place, which experienced obtained some debt relief from the China Growth Bank, experienced to treat all collectors equally and experienced currently developed up arrears on other loans, Mr Ng’andu reported.

The country’s $1bn in eurobonds, owing 2024, fell 1.8pc to 44 cents on the greenback in London. The non-payment has activated cross-default provisions in all the superb greenback bonds.

The bondholders committee, whose 15 associates stand for in combination more than 40pc of Zambia’s $3bn in superb Eurobonds, reported on Monday that investors experienced been unable to consent to a debt standstill due to the fact they never obtained facts they required for an knowledgeable determination.

That consists of particulars on Zambia’s “policy trajectory” and fiscal framework, and transparency on how the authorities intends to offer with other collectors.

There experienced been no immediate discussions involving bondholders and the authorities to date, the committee reported.