Zambia's sovereign bond performing well: official

The Zambian government said a market assessment has revealed that its two sovereign bonds were performing well, a senior official said on Friday.

Ministry of Finance public relations officer Chileshe Kandeta said in a statement that conditions on the international market were favoring the good performance of the country's two sovereign bonds.

Zambia borrowed 750 million U.S. dollars in 2012 and 1 billion dollars in 2014 from the international market to finance infrastructure development projects. The two loans are supposed to be paid in 2022 and 2024.

The official said according to a market assessment for May and June, the country's 1 billion dollars bond was trading at 107.13 percent, making it one of the best priced bonds amongst African sovereigns.

As at Tuesday, the yield rate for the 750 million dollars bond stood at 6.97 percent, he added.

According to the official, the trend was within an acceptable trajectory and also signifies the robustness of the country's economic transformation program and that it also manifests the steadfastness of the confidence that international investors have in the consistency, predictability and direction of Zambia's policies towards socioeconomic stability.

There have been concerns that the country risks defaulting on its payment of the two bonds unless measures to ensure a smooth payment were put in place.

On Wednesday, Minister of Finance Alexander Chikwanda said the government has set up a sinking fund for repaying of the funds.

He said the establishment of the fund will ensure a smooth repayment process and that the ministry has also put in place regulations on the management of the fund. Endi