Zambia bonds jump as revamp gets traction with China, India deal

Connie Queline

Zambia bonds jump as revamp gets traction with China, India deal

Zambia’s dollar debt jumped after its government said over the weekend that China and India, the last two nations needed to sign a deal to restructure Zambia’s debt, have done so.

The price of the nation’s $1.25 billion of notes due 2027 climbed by the most in a day since October. They were trading at 68.58 cents on the dollar as of 9:44 a.m. in London, the highest level since June 2022.

“China and India agreeing on terms means that we can get on with the private-creditor restructuring,” said Sam Singh-Jami, Africa strategist at Rand Merchant Bank. “We are now a step closer for Zambia to restructure all of its external debt in a very protracted process.”

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“We’re getting there,” President Hakainde Hichilema said Saturday on Zambian state-owned television. “Now we are turning our attention to the private creditors.”

Zambia reached a memorandum of understanding with official creditors to restructure $6.3 billion of debt in October. The government is in talks with other creditors, including the holders of $3 billion in outstanding eurobonds. The discussions have been deadlocked since November, when the Official Creditors Committee — co-chaired by France and China — rejected a deal in principle the administration reached with those investors.

The southern African nation signed up to use the so-called Common Framework to restructure its debts three years ago, after defaulting in November 2020.

© 2024 Bloomberg

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