LONDON (Reuters) - Holders of debt issued by Mozambique’s state tuna-fishing company Ematum said on Friday they expect to receive coupon and amortisation payments before meetings where the government will outline more details of a proposed swap.
On Wednesday, the government launched an offer to swap the $697 million of debt that is still outstanding on the issue after Friday’s repayment.
“Mozambique is expected to pay coupons and amortisation on (EMATUM) bonds today as a condition to proceed with what we expect to be an investor friendly reprofiling of its debt,” said Greg Saichin, CIO Global Emerging Markets at Allianz Global Investors.
Mozambique is one of the poorest countries in the world. Under the offer, the old bonds issued by Mozambique EMATUM Finance 2020 B.V. under an amortising structure and maturing in 2020 would be exchanged for new bullet bonds issued directly by the government and set to mature in January 2023.
The bond was initially presented in 2013 as funding for “tuna fishing and related infrastructure” although it quickly became apparent much of the cash was for maritime surveillance and security.
Holders of the bonds have been invited to meet in London and New York early next week with a delegation from Mozambique, including the finance minister and representatives from the treasury and major local banks.
“We need to see what conditions they offer and we have yet to hear about the coupon,” said another London-based fund manager. “They are hoping for a friendly exchange.”
Mozambique is set to publish more details of its exchange offer, including coupon and pricing, on March 17.
The metical currency has fallen by almost 30 percent against the dollar in 2015 as investors worry about the government’s ability to manage its finances.
Ematum bonds have been on an almost steady decline since their launch and hit lows of around 74 cents in the dollar towards the end of last month. However, following the exchange offer, they now trade above 80 cents.
Reporting by Karin Strohecker; Editing by Ruth Pitchford