S&P rates Zambia bond B+

Standard & Poor's said it assigned a B+ long-term senior unsecured debt rating to the proposed $500 million bond to be issued by the Republic of Zambia.

The agency also assigned a recovery rating of 3 to the proposed bond, indicating 50% to 70% expected recovery in a default.

The rating on the upcoming bond is equalized with the B+ long-term foreign-currency sovereign credit rating, S&P said.

The ratings on Zambia are constrained by its fairly low income levels with an estimated GDP per capita of $1,510 in 2012, the agency said.

The balance of payments is vulnerable to swings in copper prices, S&P said, and the government's economic policy direction since the October 2011 elections remains uncertain.

The ratings are supported by promising investment and economic growth trends, a fairly strong external balance sheet and moderate general government debt, the agency added.

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