ELECTIONS DERAIL EUROBOND ACQUISITION PLAN

Zambia, Africa’s biggest copper producer, will probably delay the sale of its planned $500 million Eurobond until after elections in September, central bank Governor Caleb Fundanga said.
The debt “can only be handled when there is a Cabinet in place,” Fundanga said in a telephone interview from Lusaka, the capital, today. “The matter has to be put on hold. It requires a Cabinet process to move it forward.”
Zambia is looking to raise funds to build new transport links and generate and transmit more electricity to the copper mines that drive the economy. The Eurobond was to be sold by the end this month, according to Situmbeko Musokotwane, who was finance minister before the Cabinet was dissolved last week ahead of the Sept. 20 vote.
On March 22, Standard & Poor’s assigned the southern African nation a B+ credit rating, its fourth-highest junk grade, with a “stable” outlook. Zambia’s assessment is the same as that for Kenya, Nigeria and Paraguay. Fitch Ratings assigned it B+, also four steps below investment grade, on March 2.
Zambia’s economy remains “robust,” with mining and agriculture showing expansion, and is unlikely to be disrupted by the election, Fundanga said. He warned there may be a “slight delay” in the 2012 budget presentation that was scheduled for October.
President Rupiah Banda, the 74-year-old leader of the Movement for Multiparty Democracy, will run for a second term next month against Michael Sata, head of the Patriotic Front, the largest opposition party. Sata narrowly lost in the previous ballot in 2008, winning 38.1 percent of the vote to Banda’s 40.1 percent.