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

Zambia’s finance minister reported lenders ended up at the very least partly to blame for the country defaulting on a single of its eurobonds last week, when a group of bondholders reported the missed payment risked setting a additional adversarial backdrop for debt negotiations.

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

The bondholders demanded additional details on Zambia’s debts to Chinese loan companies, but would not indicator the important confidentiality agreements, Bwalya Ng’andu reported.

Zambia missed a $forty two.5m (£32.3m) desire payment on $1bn truly worth of eurobonds maturing in 2024. The default was unavoidable due to the fact the country, which experienced obtained some debt relief from the China Improvement Financial institution, experienced to address all lenders equally and experienced already crafted up arrears on other financial loans, Mr Ng’andu reported.

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

The bondholders committee, whose fifteen members represent in combination additional than 40pc of Zambia’s $3bn in fantastic Eurobonds, reported on Monday that investors experienced been unable to consent to a debt standstill due to the fact they never obtained details they essential for an knowledgeable final decision.

That includes specifics on Zambia’s “policy trajectory” and fiscal framework, and transparency on how the govt intends to offer with other lenders.

There experienced been no direct discussions concerning bondholders and the authorities to day, the committee reported.