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Afreximbank agrees to refinance $1.4 billion Zimbabwe debt-document

Thu 4th March, 2021 7:02pm
HARARE, March 4 (Reuters) - The African Import and Export
Bank (Afreximbank) has agreed to help Zimbabwe raise funding to
refinance $1.4 billion in loans to the pan-African lender, a
copy of the agreement seen by Reuters showed on Thursday.
    The agreement will give the country some breathing space
over the loan repayments to Afreximbank, which has become one of
the biggest lenders to Zimbabwe after it was shut out from
international financial institutions two decades ago for failing
to repay its debts.
    Between December 2017 and December 2019, foreign
currency-starved Zimbabwe, through its central bank, entered
into three loan deals with Afreximbank amounting to $1.4 billion
and using gold and platinum as collateral.
    The agreement to refinance the loans, which is dated
December 2020, was signed by central bank government John
Mangudya on behalf of Zimbabwe and Ibrahim Sagna, Afreximbank's
head of advisory and capital markets.
    "Afreximbank will use all efforts to assist in the debt
raise as set out in this Mandate Letter. For the purposes of
clarity, Afreximbank will identify and approach prospective
financial institutions and investors who would potentially be
willing to provide financing to Reserve Bank of Zimbabwe and
source letters of intent from interested lenders/investors," the
agreement said.
    Mangudya did not answer his phone when called by Reuters,
nor respond to a message seeking comment. Afreximbank did not
immediately respond to emailed questions.
    Afreximbank will act as sole advisor and will remain a
creditor. The original loans had terms of between three and five
years and an interest rate of between 5.8% and 6.75% above the
London Inter-Bank Offer Rate (LIBOR). 
    Under the deal, the loan facilities would have a longer
repayment period of seven years and a fixed interest rate of
    Zimbabwe owes foreign lenders, including the World Bank and
African Development Bank more than $8 billion.

 (Reporting by MacDonald Dzirutwe; Editing by Kirsten Donovan)
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