Exxon-related jitters cause Mozambique international bonds to tumble

Mozambique’s only international bond fell on Thursday, after ExxonMobil executives cancelled abruptly a media appearance the day before with the president of the country.

Investors said that the cabinet's approval of Alvarez & Marsal as a firm to help with a "public-debt restructuring" also alarmed some on the market.

The bond fell more than three cents, to 85.5 cents per dollar, before recovering to a loss of 2.2 cents.

The press conference, which included Exxon executives as well as Mozambique President Daniel Chapo, was intended to provide media with an update on the $30 billion gas terminal. The Financial Times reported the cancellation of the briefing first.

This cancellation has added to fears about the restart of gas projects that are crucial to the revenue of the country, especially as the attacks by an islamist insurgency have intensified in the region around the facility.

Samir Gadio, Standard Chartered, said that headlines have not been supportive since yesterday, citing also news of unrest at the gas facilities in Cabo Delgado.

On Wednesday, Finance Minister Carla Louveira told journalists that the country is developing reforms for public debt sustainability. These include a strategy to manage public debt and revisions of capital market regulations.

She said, "The sustainability of our public debt is one of the greatest challenges that faces our economy." (Reporting from Marc Jones in London, and Colleen Petzer in Johannesburg. Custodio Cossey in Maputo contributed additional reporting. Editing by Libby George, Mark Potter and Mark Potter.

(source: Reuters)