The government of south Sudan would like up to 75 per cent of its debt wiped off the slate before it becomes independent in July, and yield-hungry distressed debt buyers are mulling what opportunities this could bring.
The conflict-ridden administration of president Omar al-Bashir wants creditors to cut the country's $38 billion foreign debt, Bloomberg reported on Tuesday.
Without debt relief, the northern and southern regions would have to split the debt load, an unwelcome birthday present for Africa's soon-to-be newest country. Given its high debt to exports ratio, Sudan is eligible for debt relief under the Heavily Indebted Poor Countries (HIPC) initiative. It is not expected to achieve a sustainable external debt position without generous debt forgiveness on at least HIPC terms, which has historically seen countries given about 90 per cent relief.
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