Lack of effective government in the Ivory Coast could delay a restructuring of €2.2-billion ($3-billion U.S.) in debt with commercial creditors, but will not affect the terms of the deal, the head of the creditors' group said.
"The Ivory Coast situation has got a bit more difficult. Of course we would like the new government to be appointed and to be sure everything is going well," Thierry Desjardins, chair of the London Club committee of private creditors for the Ivory Coast, told Reuters in a telephone interview.
"We do not expect any change, there could be a little delay. If things are not going well, the government cannot be formed, things could be different."
A restructuring deal would enable the West African nation, the world's biggest cocoa exporter, to once more tap international capital markets.
The Ivory Coast in September invited holders of six defaulted Brady bonds to exchange them for a new U.S. dollar-denominated bond with a term of 23 years and six-year grace period, and the exchange is due to take place no later than March 31.
Ivory Coast president Laurent Gbago dissolved the government and electoral commission last week, after a row over voter registration. This, together with the repeated postponement of a presidential poll, deepens the political uncertainty lingering after the 2002-3 war.
Mr. Gbago asked Prime Minister Guillaume Soro to form a new government by Feb 15, but Mr. Soro said on Tuesday the new government was not ready.
The new Ivory Coast bond will have 34 semiannual payments, and interest has already started to accrue ahead of launch.
"The intention is to launch and close the deal before the end of March," Mr. Desjardins said.
"If the deal is launched in April, nothing goes wrong. The interest on the new bond anyway started accruing in Jan. 1," Mr. Desjardins said.
The first coupon payment date is due on June 30, but Mr. Desjardins said that if the deal was not launched by then, interest would be paid on the coupon interest.
"Even if the deal is launched in October, it is not a problem," he said.
Investors are increasingly eyeing the higher yields offered by commodity-rich frontier African markets, and several African governments are hoping to launch Eurobonds this year.
Cocoa prices are on course for multi-year highs in 2010, with a bigger global market shortage of beans, according to a Reuters poll.
The Ivory Coast London Club deal is part of the Heavily Indebted Poor Countries (HIPC) initiative, a debt relief program managed by the International Monetary Fund and the World Bank.
The HIPC initiative aims to help Ivory Coast clear some $3-billion of its external debt, which was estimated at $14.3-billion at the end of 2007, according to the IMF.
The Ivory Coast also agreed a debt restructuring with Paris Club sovereign creditors last year.
The World Bank warned Ivory Coast last month that further debt relief hinged on long-delayed elections taking place.
However, Mr. Desjardins said the elections were not an issue for the London Club creditors.
"The IMF might want to have elections in the Ivory Coast, the Paris Club might want to. In the London Club we are private institutions, we cannot interfere in political issues of a country."