Mozambique - 03

Mozambique: EMATUM Bullet Bond and Selective Default Risk

Minister for Finance and Economy Adriano Maleiane has recently been traveling to the world’s financial centers lobbying for a restructuring of the EMATUM bond. The Mozambican side’s proposal is to turn the bond into a “bullet bond” with a higher annual interest rate but longer maturity, from 2020 to 2023. Investors will be unable to redeem the bond prior to maturity, with the bulk of the repayment due at the end of the bond’s life. The proposed terms envisage an increase in the annual interest rate from 6.305% to 10.5%; in addition, the bullet bond will be sold at a discount of 20%.

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