Mozambique’s Dollar Bond Gains After U.S. Clears $5 Billion LNG Loan

Mozambique’s sovereign dollar bond rose by nearly 2 cents following U.S. approval of a delayed $5 billion loan for a liquefied natural gas project. The bond gained 1.83 cents, reaching a bid of 80.94 cents on the dollar. The loan’s approval comes after construction on the project was suspended in 2021 due to unrest in Cabo Delgado.

On March 14, 2023, Mozambique’s sovereign dollar bond experienced a notable increase, rising by almost 2 cents following the U.S. approval of a $5 billion loan intended for a liquefied natural gas project. According to Tradeweb data, the 2031 bond surged by 1.83 cents, reaching a bid value of 80.94 cents on the dollar.

The substantial loan from the U.S. Export-Import Bank required re-approval after construction on the liquefied natural gas project was halted in 2021. This suspension was due to violent unrest in the northern Cabo Delgado region, leading to concerns regarding project viability and safety.

This approval signals renewed confidence in Mozambique’s economically strategic liquefied natural gas sector, which holds the promise of significant developmental benefits for the nation. The positive market reaction reinforces investor sentiment regarding the bond’s potential, creating optimistic prospects for future investments in Mozambique’s energy resources.

Reporting by Duncan Miriri and editing by Libby George highlights the evolving circumstances surrounding Mozambique’s financial landscape and underpin the critical importance of international financing in project recovery.

The approval of the U.S. $5 billion loan is a pivotal development for Mozambique, boosting its dollar bond market significantly. The bond’s value increase represents a restored investor confidence and optimism towards the country’s liquefied natural gas project. Moving forward, the region’s stability will play an important role in determining the success of such projects and the overall economic recovery of Mozambique.

Original Source: www.marketscreener.com