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

Zambia’s finance minister said creditors ended up at minimum partly to blame for the region

Zambia’s finance minister said creditors ended up at minimum partly to blame for the region defaulting on one of its eurobonds last week, though a group of bondholders said the missed payment risked location a extra adversarial backdrop for debt negotiations.

The southern African country became the continent’s 1st pandemic-period sovereign default, immediately after holders of the debt refused to grant it a six-month curiosity payment freeze on Friday.

The bondholders demanded extra data on Zambia’s debts to Chinese lenders, but would not signal the important confidentiality agreements, Bwalya Ng’andu said.

Zambia missed a $42.5m (£32.3m) curiosity payment on $1bn worthy of of eurobonds maturing in 2024. The default was unavoidable for the reason that the region, which experienced received some debt reduction from the China Growth Bank, experienced to handle all creditors similarly and experienced currently built up arrears on other loans, Mr Ng’andu said.

The country’s $1bn in eurobonds, owing 2024, fell 1.8pc 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 15 users depict in aggregate extra than 40pc of Zambia’s $3bn in excellent Eurobonds, said on Monday that traders experienced been not able to consent to a debt standstill for the reason that they under no circumstances received data they desired for an knowledgeable decision.

That incorporates information on Zambia’s “policy trajectory” and fiscal framework, and transparency on how the government intends to offer with other creditors.

There experienced been no immediate conversations between bondholders and the authorities to date, the committee said.