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Land Bank is anticipating that it could default on its past due debt on Thursday if bondholders do not let it postpone their payments.
A default would result in the default threshold of a cross default, meaning that all other bank debts will be due.
However, the bank said it is still engaging with affected lenders to waive the default event and postpone pending payments on Thursday. “As soon as these discussions are concluded, the Land Bank will announce the outcome of such discussions,” he said.
The bank, which recently approached the National Treasury to avoid default on other debts, also said it may have already defaulted on its national bonds issued in 2010 and 2017 totaling approximately R50 billion.
In a statement Thursday morning, the state development bank said these defaults did not automatically trigger a cross default.
This means that if the bank can successfully negotiate the debt deferment due on Thursday, it will be given more room to breathe.
Approximately R738 million of the bank’s debt is scheduled to mature before the end of April, but due to its current liquidity problems, it needs to defer these payments.
