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Republic of Congo set to cure bond default fastFT Read next fastFT Spanish jobs recovery pushes into 43rd month new 32 minutes ago Share on Twitter (opens new window) Share on Facebook (opens new window) Share on LinkedIn (opens new window) Print this page August 8, 2016 by: Robin Wigglesworth One of the briefest sovereign defaults in history? The Republic of Congo today made a belated but full interest payment on a $478m bond, after mysteriously failing to do so on the due date on June 30, resulting in rating agencies declaring a sovereign default at the end of last month, writes Robin Wigglesworth in New York. There is little information on why the African country – more commonly known as Congo-Brazzeville to differentiate it from the neighbouring Democratic Republic of Congo – missed the interest payment, with S&P merely noting the end of the grace period on July 30 when it belatedly downgraded the debt to “default”. The yield on the bond, which was issued as part of a restructuring of its London Club debts in 2007, subsequently spiraled to over 10 per cent but the Emerging Markets Trading Association said on Monday that it had received confirmation that the government had deposited the funds with Euroclear, and investors would receive payment by Tuesday. While the exact cause for the brief default remains unclear, Congo-Brazzeville depends heavily on oil exports, and the tumbling price of crude has taken its toll on the government’s finances. The latest report by the International Monetary Fund – published in September last year – noted that the Republic of Congo “has been hit hard by the oil price shock”. In 2014 oil revenues accounted for almost 70 per cent of the government’s total revenues. In its statement on August 2 S&P said: If and when the Republic of Congo cures the payment default on the notes, we will revise our ratings on the sovereign depending on our assessment of residual litigation risk, access to international debt markets, and the sovereign’s overall credit profile.
un omaggio a Villaggio, immagino...
