Association applauds Eurobond holders response, wants govt to outline timeline for endorsing agreements

The positive response from Zambia’s bondholders indicates confidence that the new terms are favourable for both the country and the bondholders under the current credit conditions.

This development is also a positive step toward achieving the objectives of the G20 countries’ Common Framework, which calls for equal treatment of Zambia’s debt restructuring process by all creditors.

This information comes from Oswald Mungule, President of the Economics Association of Zambia (EAZ), in a statement issued on Wednesday.

Mungule stated that the consent solicitation issued to Eurobond holders on May 13, 2024, was a critical step in reaching the current debt restructuring deal.

The bondholders reportedly responded positively to the call for consent to the restructured terms of the initial US$3 billion Eurobond.

Read more: Zambia initiates Eurobond consent solicitation as next step in debt restructuring process

“The full restructuring of the Eurobond under the new deal will provide Zambia with cash flow relief of about US$2.5 billion until 2025, when the International Monetary Fund (IMF) Extended Credit Facility comes to an end,” he said.

Looking ahead, Mungule urged the government to clearly outline the timelines for signing the final agreements with both bilateral and Eurobond creditors to implement the new terms.

He expressed concern that prolonging the process could create economic uncertainty and undermine credit status gains.

“Furthermore, the EAZ implores the government to formulate a clear roadmap for resource mobilization specifically for all debts under debt service suspension, as the current development on the Eurobond implies transitioning towards resumption of debt servicing.

“The government must consider prevailing economic conditions and ensure that debt obligations are manageable within the broader fiscal framework,” Mungule added.

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