Mozambique will not blink first as battle with bondholders heats up
Lusaka/London — Do not expect Mozambican officials to back down in a stand-off with investors, even though it may be the first African nation to default on dollar bonds since 2011. As recently as last week, bondholders were convinced the nation would pay the almost $60m bond-coupon on schedule on January 18. Not only did the government on Monday say that was not happening, it also signalled it will not make payments in 2017. Since Mozambique issued the notes last year, bondholders have discovered the southern African country has debts it failed to disclose, a revelation that prompted the IMF to withdraw its support in April. "It might put the restructuring discussions in a more fractious position between the two sides with the government having done this and bondholders feeling aggrieved," said Stuart Culverhouse the London-based chief economist at Exotix Partner who downgraded his outlook on Mozambique’s bonds less than two weeks before they plunged in October. Neither side was on ...
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