Gabon Paid Overdue Eurobond Coupon on Settlement, S&P Says
Gabon made an overdue June coupon payment on its $1 billion of Eurobonds yesterday after settling a legal dispute in an English court, according to Standard & Poor’s.
The yields on the 8.2 percent international bonds maturing in 2017, which have fallen 0.8 percent this year, retreated three basis points to 4.54 percent as of 2:35 p.m. in London, according to data compiled by Bloomberg.
South Africa’s Nedbank Group Ltd. (NED) and construction company Aveng Ltd. (AEG) agreed to a government proposal from the oil- producing Central African nation to settle a legal dispute that delayed coupon payments, Sylvain Allogho, an adviser to the economy minister, said yesterday. Gabon said on June 20 that a court order froze funds intended for note holders.
“After a settlement between Gabon and the plaintiff, the funds were unfrozen, and the paying agent made the $32 million coupon payment, which was originally due June 12,” S&P said in a statement today, without saying where it got the information. “We consider that the delayed coupon payment was unrelated to Gabon’s ability and willingness to make that payment. In our view, the government moved quickly to unfreeze the funds in order to service its debt within the contractual grace period.”
Gabon’s long- and short-term local and foreign currency sovereign credit ratings were affirmed as BB-/B, S&P said in the statement. The nation is also rated BB- by Fitch Ratings, the third-highest non-investment grade rating at both companies, the same as Angola and Georgia.
“The matter has been resolved,” Brian Kennedy, the managing executive of Johannesburg-based Nedbank Capital, said by mobile phone today. “We are very happy; we have no issue with the government at all.”
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