Warning Signs for Zambia as Eurobond Curve Becomes More Inverted
- Zambia has highest dollar yields of countries not in default
- Inversion is sign of investor concern, says Rand Merchant Bank
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Zambia’s finance minister said this month there’s no need to worry about the government’s debt load. Investors are sending the opposite signal.
The yield curve for the southern African nation’s Eurobonds, which are the worst performers in emerging markets in the past year, is increasingly inverted -- meaning that shorter-dated securities have higher yields than those with longer maturities. That’s a rarity and often occurs when countries are already in default, with one example being Venezuela.