Zambia is one of the first African countries to declare bankruptcy - the COVID-19 pandemic has brought the country to the brink of total ruin. The treasury is empty, and investors who previously owned $ 3 billion in government bonds are not ready for the suspension of payments, requested by the authorities. Holders of securities are most irritated by the different attitudes of the African state towards individual creditors.

According to the numerous sources, the authorities were in no hurry to disclose information about their projects to get rid of the existing economic imbalance. At the same time, rumors about a possible default and the ensuing warning have already managed to bring down the cost of bonds maturing in 2024 by more than 3%.

Zambia had previously committed to pay interest on investments in securities by October 14, but this has not been done.

The external debt of the African state is $ 12 billion, which is much higher than the standards of IMF. The Treasury Department noted last Wednesday that the success of the agreement with creditors would determine, whether Zambia becomes the first state in Africa to declare a default.

The fact that many countries under the influence of the pandemic had a reduction in assets to the threat of complete ruin was announced by Fitch agency back in July 2020. Analysts had to lower the sovereign rating of 33 states for the first time in six months. At the same time, the fact that more than 100 countries applied to the IMF for urgent credit assistance, became known back in April.

The default, according to experts, threatens not only Zambia, but also a dozen of other countries.

What will be the final vote of the holders of state securities? This will become clear next week. While investors do not intend to comply with the request of the Zambian authorities for a delay, they understand that in the face of a pandemic, reducing the country's debt burden will be incredibly difficult.

In addition, there is one-month grace period to pay the interests on Eurobonds in the amount of $ 42 million, due to which the country may go bankrupt. After that, the default will move from the matter of discussion to reality.