Zambia has finally launched its US$1bn 10-year Eurobond at a final yield of 8.625%, according to government sources. The bond was allegedly oversubscribed by US$4.25bn, much lower than last time. The government tried to do this before Christmas but held back to see which way the liquidity wind was blowing.
As this is a 10 year bond, Zambia will be paying interest of 8.625% or $86m per year for the next 10 years. It will then need to pay back the final $1bn in 2024. Zambia is currently paying around $40m interest annually on its first Eurobond of $750m. It is due to pay back the full $750m in 2022.
This means whoever is in charge from 2021 will immediately have to find nearly $2bn to pay back on top of all other interest repayments from loans accruing between now and then.
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