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Zambia has finally reached a conclusive deal to restructure its over US$3 billion Eurobond debt with External Bondholder Steering Committee.
The announcement was made by the Committee in a statement and confirmed by President Hakainde Hichilema on his official Facebook handle on Monday.
This agreement followed the government’s confirmation that the terms of the 2024 Agreement were compatible with Zambia’s Official Creditor Committee assessment of comparability of treatment and the International Monetary Fund (IMF) programme parameters under the Second Review framework.
The statement showed that prompt implementation of a debt restructuring agreement with bondholders was not only in Zambia’s interests, but the wider creditor community as a whole.
A spokesperson on behalf of the Committee said: “We are pleased to have finally reached a definitive and conclusive agreement with the government that is supported by all stakeholders and which will in due course, restore full international capital markets access to Zambia and encourage long-term investment in the country, to the benefit of all Zambians.”
The proposed restructuring terms set out in the 2024 Agreement were based on the same structure as the November 2023 AIP.
Two new Eurobonds would be issued which provide future debt relief commensurate with Zambia’s economic progress in the next few years.
“The 2024 Agreement also includes agreement on certain non-financial terms, including a most favoured creditor clause that will ensure that certain other creditors do not receive a better recovery in the restructuring on net present value terms, a loss reinstatement clause if Zambia were to default during the term of the IMF programme and certain ongoing information covenants for Zambia,” the statement showed.
Implementation of the 2024 Agreement was conditional on mutual agreement on deal documentation and the objective was to fully implement the agreement as promptly as feasible.
Commenting on the development, President Hichilema expressed great relief after Zambia had agreed to restructure US$3 billion in eurobonds.
The Head of State thanked Zambians for their patience on the issue.
The President said the country could now focus on its economic recovery path following the development.
He said on his Facebook handle: “Fellow citizens. It’s done. Debt deal done with Eurobond holders of over $3.5 billion. What a journey and thank you Zambians for your patience and unwavering support during this process that has taken long to conclude.
“Now that this is done, our economic recovery is back on track.”
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