Mozambique’s public debt creditors feel defrauded by default on coupon payment

24 January 2017

Mozambique’s public debt creditors have warned that they reserve the right to use all legal means at their disposal to be reimbursed, including the payment of the coupon that Mozambique has decided not to honour, said the commission in a statement on Monday.

The statement added that this measure will be adopted if Mozambique and the respective directors fail to take a constructive approach, which includes the defaulted coupon payment for January in the amount of US$59.7 million.

The creditors’ committee said in a statement sent to Macauhub that defaulting on the coupon payment was unnecessary, as the economic and financial situation in Mozambique has improved since last October.

The statement recalls that the non-payment of that coupon was selective, given that Mozambique has been able to meet other obligations, “something that is not conducive to restoring the confidence of funding sources that Mozambique needs to carry out the objectives of growth and development.”

For this group, which includes investment houses AllianceBernstein, Franklin Templeton Investment Management and Greylock Capital Management, as well as NWI and Pharo Management, the lack of payment of the January installment, “was a step back from the point of view that Mozambique is in negotiations with creditors in good faith.”

The Mozambican Ministry of Finance recently confirmed that it would not pay the January installment of US$59.7 million for sovereign debt securities with maturity in 2023 as a result of restructuring of debt issued by Mozambican tuna company Ematum, thus going into financial default. (Macauhub)