Q FM Africa's Modern Radio
The Ministry of Finance has dispelled assertions that government only managed to issue the US$1.25 billion Eurobond instead of the intended US$2 billion because the country’s foreign debt stock has exceeded the prudent limit of 40% of GDP.
Secretary to the Treasury Fredson Yamba has told Qfm News in an exclusive interview that government in fact targeted to issue a Eurobond of between US$1 Billion and US$1.5 Billion.
Mr Yamba says government however opted to issue US$1.25 Billion Eurobond with a coupon at the conclusion of its Road show after the final book for the bond reached US$2.5 Billion.
Fredson Yamba
Mr. Yamba says this was from more than 175 investors.
He states that the redemption of the US$1.25 billion Eurobond is also in three installments in July 2025, July 2026 and July 2027.
The Secretary to the Treasury says Zambia’s debt therefore has not reached the 40 percent of GDP.
He states that there is a debt sustainability analysis to this effect in which it has been determined with a high degree of certainty that government will be able to pay interest rates for borrowed funds when they fall due.
Mr. Yamba says government does not further see any encumbrances in repaying the three Eurobonds when their redemption is due.
He adds that there are a number of modalities government is looking at which include establishing a sinking fund as well as the option of refinancing the Eurobond.