ZAMBIA has reached an agreement in principle on debt restructuring terms with a creditor group holding its international bonds, a milestone in the country’s drawn-out debt rework process.
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The agreement will see the three existing bonds restructured into two new amortising bonds maturing in 2035 and 2053 respectively, under a “base case” scenario, the Ministry of Finance and National Planning disclosed yesterday.
Both bonds would mature in 2035 if the country’s economy performs better. Under both scenarios, the deal would translate into an 18 percent nominal haircut, the ministry said.
The proposed restructuring includes a $700 million write-off and $2.5 billion in cash flow relief during the period of Zambia’s $1.3 billion, 38-month IMF programme, which was approved in September 2022.
Zambia was the first African country to default in the Covid-19 era, in late 2020, and its restructuring process suffered numerous delays.
International bondholders also complained they were left out of the process, which started with drawn-out negotiations with bilateral creditors including China.
The agreement “paves the way for similar restructuring agreements with our other private creditors,” Finance and National Planning Minister Situmbeko Musokotwane said in a separate statement.
“We hope for the swift implementation of this agreement in principle by the end of the year.” – REUTERS.
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