The real news...

...regarding the below snippet is not so much the financial fall-out.  The real news here is WHERE the bonds were issued and under what LAW they are governed.  Bonds issued in the U.S. and subject to U.S. jurisdiction are good substitutes for Aid packages (that are subject to various political tendrils).  Bonds issued in London and subject to U.K. law are also good substitutes for direct Aid packages given the similarities of U.K. and U.S. default, liquidation, and Bankruptcy law.

The point being that Western powers have wrestled a massive portion of control away from China and other waning interests in Sub-Saharan Africa...once again outmaneuvered by its more nimble, open, and adaptable opponents.

In purely financial terms, these Bonds are extremely risky...but the The West (primarily the U.S.) is the House, and The House always wins.

Full article here.  And its once again notable that Economists always see events like these in purely economic terms.

IN RECENT years, a growing number of African governments have issued eurobonds, diversifying away from traditional sources of finance such as concessional debt and foreign direct investment.

Taking the lead in October 2007, Ghana earned the distinction of being the first sub-Saharan country other than South Africa to issue bonds in 30 years. This sparked a sovereign borrowing spree in the region. Nine other countries followed suit. By February, these 10 African economies had collectively raised $8.1bn from their maiden sovereign-bond issues, with an average maturity of 11.2 years and an average coupon rate of 6.2%. These countries’ existing foreign debt, by contrast, carried an average interest rate of 1.6% with an average maturity of 28.7 years.

Sovereign bonds carry higher borrowing costs than concessional debt does. So why are developing countries resorting to sovereign-bond issues? And why have lenders suddenly found these countries desirable? One explanation is that this is just another manifestation of investors’ search for yield. Moreover, recent analyses have demonstrated the woeful inadequacy of official assistance and concessional lending for meeting Africa’s infrastructure needs. Moreover, the conditionality and monitoring associated with the multilateral institutions make them less attractive sources of financing.