Bloomberg News

Ivory Coast Wants Bond-Pay Schedule Revision, Minister Says

June 01, 2011

(Adds government statement in fifth paragraph.)

June 1 (Bloomberg) -- Ivory Coast is “looking to revise” the schedule of payments it needs to make on its defaulted Eurobonds, and not the terms of the debt itself, said Finance Minister Charles Koffi Diby.

An Ivorian team will hold talks with the Paris and London clubs of creditors next week “to see what we can do and find an agreement that satisfies the market, the creditors, and Ivory Coast,” Diby said in a phone interview today. “We are committed to respecting our creditors.”

The $2.3 billion of dollar-denominated bonds due 2032 of the world’s biggest cocoa producer gained 4.2 percent to 55.286 cents on the dollar as of 4:01 p.m. in London, according to prices compiled by Bloomberg. The debt fell 6.2 percent yesterday to 53.068 cents on the dollar, the lowest price since April 11. The bonds have rallied 58 percent since their record low on March 16.

The West African nation will not make a $28.6 million interest payment due by June 30, Diby told reporters yesterday. Ivory Coast failed to make a $29 million interest payment due at the end of January as Alassane Ouattara, internationally recognized as victor of Nov. 28 elections, was locked in a five- month political standoff with Laurent Gbagbo, whose refusal to step down triggered a civil war.

IMF, ADB Support

The government hasn’t contacted the London Club of creditors about interest payments on the bonds, Thierry Desjardins, chairman of the London Club, said by telephone earlier today. Ivory Coast is looking to present a proposal to bondholders by July, Diby said in a statement posted today on the Emerging Markets Traders Association website.

The government is seeking emergency funds from the International Monetary Fund, the World Bank and the African Development Bank in a bid to stabilize the economy after the four-month political crisis that following a disputed November presidential vote. More than 2,000 people may have died in post- election violence, according to the United Nations.

The African Development Bank will give 77 billion CFA francs ($168 million) in budget-support funding to Ivory Coast, Richard Dofonssou, the Tunis-based lender’s representative in the country, said yesterday.

The Washington-based IMF’s board will decide on whether to approve a $130 million loan in July, Doris Ross, head of the delegation of international lenders visiting the nation, told reporters in Abidjan yesterday.

Ivory Coast’s economy may contract 7.5 percent this year, from growth of 2.6 percent in 2010, according to the IMF.

“Clearly, trade and export activities have only started to resume after the post-election crisis and many businesses affected by the violence and looting are in need of financial support,” Barclays Capital strategists, including London-based Andreas Kolbe, wrote in a research note today. “Against this background, the payment of the bond coupon does not seem of utmost priority at this stage.”

--With assistance from Boris Korby in New York. Editors: Ana Monteiro, Linda Shen

To contact the reporters on this story: Olivier Monnier in Abidjan at omonnier@bloomberg.net; Chris Kay in London at ckay5@bloomberg.net

To contact the editor responsible for this story: Gavin Serkin at gserkin@bloomberg.net


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