Despite racking up huge debts, China’s local governments aren’t allowed to issue bonds to help pay them off. Although there is a small trial programme underway, the market is still effectively closed.
However, the ban doesn’t stretch to local government finance vehicles – LGFVs for short – which are technically corporations, even though they do the work of a government body. Bonds issued by LGFVs – called chengtou bonds – have been booming. Continue reading »
Zambia seems determined to keep itself in the frontier debt market headlines. Following its heavily over-subscribed 10-year $750m debut eurobond issue in September, other organisations want in.
December saw state energy company, Zesco, announce plans to tap international markets for up to $2bn. Lusaka city council followed with plans for a $500m municipal bond issue to fund new housing, and this week deputy finance minister Miles Sampa told Bloomberg that the towns of Solwezi and Livingstone would be next. Continue reading »