Log in
E-mail
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
New member
Sign up for FREE
New customer
Discover our services
Settings
Settings
Dynamic quotes 
OFFON

MarketScreener Homepage  >  News  >  Interest Rates

News : Latest News
Latest NewsCompaniesMarketsEconomy & ForexCommoditiesInterest RatesBusiness LeadersFinance Pro.CalendarSectors 

Zambia's bonds slump as key payment deadline looms

10/14/2020 | 09:00am EST

LONDON, Oct 14 (Reuters) - Zambia's bonds fell heavily on Wednesday as an escalating standoff between the government and the country's private sector creditors fed fears of a ugly default by one of the world's largest copper producers.

One of the country's international bonds with a $42.5 million coupon payment due on Wednesday slumped over 3.5 cents on the dollar, its biggest drop since April when the government first signalled it wanted to delay debt payments.

The finance ministry issued a statement late on Tuesday repeating a request made to creditors last month for a number of its debt payments to be deferred until April to give it time to fix its problems.

"Should Zambia fail to reach an agreement with its commercial creditors (including holders of its Eurobonds)... the Republic with its limited fiscal space will be unable to make payments," the finance ministry statement said.

Creditors rejected the original request, saying the government had not laid out or discussed its plans with them, or said whether its other key lenders such as China would also delay payments.

That view hadn't changed on Wednesday.

"A consent solicitation (to delay payments) is very, very unlikely to be approved by creditors," said one of the members of the Zambia External Bondholder Committee, Kevin Daly at Aberdeen Standard Investments in London.

"At this stage we just don't have enough assurances from the government."

If the Zambian government fails to make Wednesday's bond coupon payment it has a 30 day 'grace period' where it can still do so before formally defaulting.

Overall it has $3 billion of Eurobonds outstanding and owes $2 billion to commercial banks, $2 billion to the International Monetary Fund and World Bank, and another $3 billion to China.

It woes have been compounded by a 30% drop in the value of the kwacha this year. The country's debt-to-GDP ratio is also expected to top 100% having ballooned from just over 30% in 2014.

(Reporting by Marc Jones; Editing by Tom Arnold, Kirsten Donovan)


© Reuters 2020
Latest news "Interest Rates"
08:48aUK to sell record 485.5 billion pounds of bonds in 2020/21
RE
08:04aBank of Korea seen holding rates this week and throughout 2021
RE
06:40aRegulatory Pressure Mounts on Coal Miner that Rattled China's Bond Market
DJ
02:03aStability report - swedish fsa says increased infection rates across europe can slow recovery, and in the longer term affect financial stability
RE
11/24NZ cenbank to tighten mortgage lending as prospects for negative rates dim
RE
11/24Australia, NZ dlrs lifted by global cheer, rising bond yields
RE
11/24REFILE-UPDATE 2-NZ cenbank to tighten mortgage lending as prospects for negative rates dim
RE
11/24Williams says goal of asset purchase program is also to lower long term interest rates
RE
11/24Williams says goal of asset purchase program is also to lower long term interest rates
RE
11/24Analysis - China's bond defaults show Beijing's war on debt is back
RE
Latest news "Interest Rates"