China Exim Bank Defers Zambian Loan While Lusaka and Bondholders Go At Each Other Following Debt Default

The Zambian finance ministry announced that it has reached a deal with the China Exim Bank to defer the repayment of loans totaling $110 million that were scheduled to come due through the end of 2021.

The deal was concluded within the framework of the G20’s Debt Service Suspension Initiative and includes both interest and principal payments. It also marks the second time in less than a month that the government has restructured debts with China’s policy banks. In October, the China Development Bank agreed to a six-month deferral of a single loan of undetermined size.

The finance ministry said in its statement that it will continue to “engage private Chinese lenders based on friendly consultations” to pursue “transparent” debt relief.

The news of the China Exim Bank deal came on the same day that the Zambian government got into a tussle with its bondholders over who was responsible for the country defaulting on $3 billion of Eurobond notes. On Saturday, Zambia became the first African country this year to formally default on its debt after it was unable to make a $42.5 million payment.

Bondholders, Government Exchange Accusations Over Who’s to Blame for Zambia’s Partial Debt Default

  • BONDHOLDERS: “The Committee has no basis to conclude that the authorities intend to treat bondholders on an equitable basis with other commercial and non-concessional creditors…members of the Committee reserve the right to consider other options and remedies as provided for under the terms and conditions of the Eurobonds should substantive progress fail to be achieved” — Zambia External Bondholder Committee (REUTERS)
  • ZAMBIA: “The issue of paying bondholders alone is a fundamental issue to the other creditors. If I pay, the moment I pay, the other creditors are going to put dynamite under my legs and blow off my legs. I’m gone. I can’t walk anymore. If I don’t pay the bondholders, my legs will remain intact, but I’ll probably have a shot in the arm, and I’ll be bleeding in the arm. I can walk.” — Finance Minister Bwalya Ng’andu(BLOOMBERG)

Transparency about Chinese loans was among the bondholder committee’s central concerns. Finance Minister Ng’andu addressed that issue specifically in an interview yesterday with Bloomberg:

“The information they wanted required very elaborate information relating to loans we have with other creditors. The view and position of the other creditors was: ‘OK, you can do it but you must first have a confidentiality agreement with bondholders.’ As it turned out, they didn’t sign. The position of the Chinese banks is ‘you’re not going to give anybody any information’ without the confidentiality agreements in place.”

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The post China Exim Bank Defers Zambian Loan While Lusaka and Bondholders Go At Each Other Following Debt Default appeared first on The China Africa Project.



source https://chinaafricaproject.com/2020/11/17/china-exim-bank-defers-zambian-loan-while-lusaka-and-bondholders-go-at-each-other-following-debt-default/?utm_source=rss&utm_medium=rss&utm_campaign=china-exim-bank-defers-zambian-loan-while-lusaka-and-bondholders-go-at-each-other-following-debt-default

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