Bondholders’ rejection will not trigger payments from govt, says Ng’andu
THE decision by the bondholders to reject Zambia’s request to defer interest payments will not trigger any payments from Government because all creditors have to be treated equally, Finance Minister, Bwalya Ng’andu has said.
In an interview, Dr Ng’andu said by making $42.5m coupon payment, Zambia will complicate the way she deals with other creditors.
“If we are paying, we could have paid yesterday (Friday). We deferred a payment from a month ago waiting for the decision by the bondholders and they have declined that request but that will not trigger payments from us because it will essentially complicate the way we deal with other creditors.
The requirement is that we treat all of them equally,” the minister said. Dr Ng’andu was reacting to remarks by economic experts that government should consider immediately paying the US$42.5 million coupon payment which fell due last month so that Zambia can have a leverage to negotiate with the bondholders as it still has up to next week to make the payment.
Zambia, under the Cure Period still has up to Wednesday next week to meet its obligation.
A Cure Period is a time frame of 30 to 90 days during which a company that has gone into technical default on a contractual payment is permitted to submit payment without further prejudice, and without being considered to have defaulted.