Creditors and Mozambican government agree new bond loan restructuring

7 November 2018

A group of lenders and the Mozambican government have agreed to exchange US$726.524 million in bonds for new debt and a percentage of profits from natural gas exploration, a spokesperson said.

The agreement reached with the Mozambican Ministry of Economy and Finance means investors will receive almost all of the capital invested as well as interest on the issue of bonds whose coupons offered an interest rate of 10.5% and maturity in 2023.

Mozambique has failed to pay the coupons related to the issue of bonds in January 2017, having been involved in negotiations with a group of investors representing 60% of the debt, including Farallon Capital Europe LLP, Greylock Capital Management, LLC and Pharo Management LLC.

The Ministry of Economy and Finance said in a statement issued on Tuesday in Maputo that current bondholders could exchange their bonds for new ones.

The statement added that there will be a new issue of unsecured bonds with a face value of US$900 million, at an interest rate of 5.875% and repayment until 2033.

The Mozambican parliament is one of the entities that have to approve the agreement reached, but the Ministry of Economy and Finance announced that it intends to conclude this deal as soon as possible, probably in early 2019.

This agreement concerns the US$850 million State-backed bond issue by Mozambican tuna company Ematum, which had already undergone previous restructuring. (macauhub)