Mozambique will miss bond repayment
The country says its ability to repay debt this year is ‘extremely limited’
Mozambique has said it will not make a January 18 payment to holders of its 2023 bond because of its deteriorating economic and fiscal situation. The announcement from the finance ministry on Monday answers recent speculation about whether a default was looming. The country, whose total foreign obligations are roughly equivalent to its gross domestic product (GDP), said its financial difficulties made its ability to repay debt this year "extremely limited". JPMorgan Chase said last week that Mozambique was poised to miss payment on a $60m this week, but a former International Monetary Fund official who is advising bondholders insisted the government had the money. "It’s in the interest of Mozambique, as well as the bondholders, for the government to pay the coupon," Charles Blitzer said in an e-mailed response to questions from Bloomberg. "I can’t see any good consequences if it doesn’t. The market has overreacted in spades." The country’s $727m of bonds sank to a record after JPMor...
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