Mozambique, the financially-embattled African nation, said on Monday it will miss a $60 million (€56.6 million) payment on an Irish Stock Exchange-listed bond this week.
With the government grappling with a hit to commodities-based revenues in recent years and the International Monetary Fund’s (IMF) move in 2016 to cut aid, Mozambique said in October it will seek to restructure debt.
Mozambique’s finance ministry said in a statement published on the Irish bourse’s website that, due to the country’s “deteriorating macro-economic and fiscal situation”, its capacity to make debt payments “is therefore extremely limited in 2017, and does not allow the republic room to make the scheduled interest payment on the notes”.
Mozambique is working actively with the IMF to establish the conditions necessary for an early resumption of its financial assistance to the country. Aid had been suspended in April after it emerged the government secretly took out government-guaranteed loans of more than $2 billion from international banks.
Mozambique's $726.5 million of Irish-listed bonds that are due to mature in 2023, and which carry an annual interest rate of 10.5 per cent, are currently trading at a little more than 50c on the dollar. The Irish Stock Exchange is second only to Luxembourg among the world's main hubs for the listing of sovereign and corporate debt. Corporate defaults are far more common than sovereign ones.
