Collateralized by their own securities, African states borrow at a low cost. Bondholders fear footing the bill.
Imagine a borrower who, to secure a loan, leaves the lender not their gold watch, but their own debt acknowledgments.
KIVIA ANALYSIS
African debt: How total return swaps allow certain states to finance themselves
Key takeaways
- Collateralized by their own securities, African states borrow at a low cost.
- Bondholders fear footing the bill.
- Imagine a borrower who, to secure a loan, leaves the lender not their gold watch, but their own debt acknowledgments.
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