Financing needs, debt sustainability and the crystal ball

Zambia is expected to become the SSA region’s first Covid-19-related (albeit not pandemic-originated) distressed debt exchange (DDE) casualty. While we believe that inference that can be drawn from the Zambia event is limited at this stage, the rejection of the debt standstill proposal by Zambian Eurobond holders raised concerns regarding potential spillover effects to the rest of sub-Sahara Africa (SSA).

blog 22What you will learn:

  • The various factors which may obscure the estimation of gross financing needs going into 2021, as well as risk factors to look out for over the medium term.
  • Cognisant of these factors and sensitivities toward external conditions, we have constructed a risk index to serve as a guideline towards potential roll-over challenges or funding squeezes over the short term.
  • How information asymmetry may impact restructuring negotiations and create tensions between creditors.

Topics: Financial risks

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