Mozambique obtained renegotiation of the terms of a bond of more than $726 million, Macauhub indicated this week citing official sources.

According to information reported by the media, the new debt restructuration agreement plans for postponement of the deadline of about $726.5 million bonds issued by Maputo.

In the framework of that agreement, investors should also have a percentage of the profits generated by the giant gas exploration projects initiated by the state. This should allow the investors to receive all the funds invested along with the 10.5% interest on the bonds issued for initial maturity set for 2023.

In 2016, Mozambique revealed the existence of more than $2 billion of hidden debts which placed the country in a defaulting position. It led to suspension of IMF and other foreign investors’ help to the country, compelling it to seek solutions to restructure its debt.

Let’s note that thanks to the new agreement, a new $900 million Eurobond that would mature in 2033 with 5.875% coupon would be issued.

"It is a good deal, there are no winners or losers here. All the parties wanted to define a package that is fit for the reality in Mozambique, finding a robust structure with low probability of default in the future and that will mirror the cash flows", said a source close to the matter cited by Reuters.  

Moutiou Adjibi Nourou