The military coup in Gabon has caused a significant drop in the country’s dollar bonds, the largest since the COVID-19 pandemic. This comes shortly after Gabon carried out Africa’s first debt-for-nature swap. The bond due in 2025 experienced the biggest decline, falling by as much as 14 cents, before recovering to end the day down around 8.5 cents. The coup could potentially lead to sanctions that complicate financial transactions, posing immediate risks to bondholders. This event also raises concerns about access to finance for African countries, which have struggled to secure international debt markets due to rising interest rates and mounting debt levels. Investors will reconsider their interest in Gabon and the wider political landscape in the region. Furthermore, multilateral and bilateral lenders may suspend or alter concessional lending in response to the coup. Gabon’s completion of its “debt for nature” swap this month, involving the issuance of a new “blue bond” for ocean conservation, could face uncertainties in the future due to weak economic and political fundamentals. The impact on other bond issuers in Sub-Saharan Africa is uncertain, but given the existing strains, immediate effects may be limited.
Denial of responsibility! VigourTimes is an automatic aggregator of Global media. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, and all materials to their authors. For any complaint, please reach us at – [email protected]. We will take necessary action within 24 hours.
