The Zambia External Bondholder Steering Committee has successfully reached an agreement with the Government of Zambia on the restructuring of Zambia’s Eurobonds, totaling US$3 billion.
The agreement, known as the 2024 Agreement, follows the confirmation by the Government that its terms align with the Official Creditor Committee (OCC) assessment and the IMF’s program parameters under the Second Review framework.
President Hakainde Hichilema expressing excitement on his facebook page wrote “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. Phew!”
Since November 2023, when the previous agreement-in-principle (AIP) fell short of meeting comparability of treatment provisions, the Committee has continued to support the Government’s efforts towards restructuring. The 2024 Agreement offers further debt relief while ensuring the cure of the standing default on the Eurobonds.
The restructuring terms are based on the same structure as the November 2023 AIP. The agreement includes the issuance of two new Eurobonds (Bond A and Bond B), offering future debt relief based on Zambia’s economic progress. It also includes enhanced repayment terms and higher coupons on Bond B, contingent on Zambia’s debt carrying capacity and meeting IMF projections.
The Committee expressed appreciation for the collaborative discussions with the Government that led to the agreement, aiming to restore international capital markets access to Zambia and encourage long-term investment.
The key elements of the 2024 Agreement are outlined in the Government’s press release. Implementation is subject to mutual agreement on deal documentation, with efforts to execute the agreement promptly.
The Committee urges all Eurobond holders to consider the terms of the Government’s prospective offer and make independent assessments of participation risks and merits.
Members of the Committee include asset managers such as Amia Capital LLP, Amundi (UK) Limited, Farallon Capital Management, LLC, Greylock Capital Management, LLC, and RBC BlueBay Asset Management. The Creditor Committee is advised by Newstate Partners and Weil Gotshal & Manges (London) LLP.
Below is the Press Release
Government of the Republic of Zambia Reaches Agreement on Debt Restructuring Terms with the Steering Committee of the Ad Hoc Creditor Committee of holders of Zambia’s Eurobonds
Lusaka, Zambia, March 25, 2024 – The Ministry of Finance and National Planning of the Government of Zambia (the “Government”), advised by Lazard Frères and White & Case LLP, acting respectively as financial and legal advisors, is pleased to announce that following private discussions between March 18 to 25, 2024 with the members of the Steering Committee (the “Steering Committee”) of the Ad Hoc Creditor Committee (the “Committee”), advised by Newstate Partners LLP and Weil, Gotshal & Manges (London) LLP, it has reached an agreement with the Steering Committee on the key commercial terms of a proposed restructuring transaction (the “Restructuring”) relating to the Government’s bonds due 2022, 2024 and 2027 (the “Bonds”, and the holders thereof, the “Bondholders”). The members of the Steering Committee currently own or control approximately 16% of the outstanding Bonds, while all the members of the Committee currently own or control more than 33% of the outstanding Bonds.
Pursuant to the agreement, Bondholders will be invited to exchange and/or vote in favor of a consent to amend the terms of their Bonds for new fixed income instruments representing unsecured obligations of the Government (the “New Bonds”). The structure of the agreement is unchanged compared to the agreement in principle reached on November 20th, 2023, with revised terms outlined in Annex A hereto for both the Base Case and Upside Case treatments.
The Government has received confirmation that the agreed terms are compatible with the OCC’s assessment of comparability of treatment and are compatible with IMF’s program parameters under the Second Review framework.
The agreement entails important concessions from the Bondholders, while providing the required debt relief to the Government. Under the agreement, Bondholders would forego approximately $840 million of their claims, and provide cash flow relief of approximately $2.5 billion during the IMF programme period. Respective weighted average maturity will be 15 years and 8 years under the Base Case Treatment and the Upside Case Treatment. As a result, the present value concessions from the Bondholders at current market rates will be significant. However,these concessions are necessary given the constraints faced by Zambia and are essential to achieve the relief required under the Debt Sustainability Analysis to restore financial stability to the country.
The agreement with the Steering Committee also includes the Government accepting certain non-financial terms of the New Bonds, including a most favoured creditor clause that will require the Government to ensure 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 existing IMF program and certain ongoing information delivery requirements by Zambia.
The Government and Steering Committee intend to use their best efforts to finalize documentation for the exchange and / or consent promptly.
The Restructuring will be implemented through an exchange offer and/or consent solicitation. Implementation of the Restructuring remains subject to agreement between the Government and the Steering Committee on the definitive legal documentation for the New Bonds and exchange offer and/or consent solicitation.
Pobo, twalaumfwa kuliba nkusa efyo balalanda
Pobo we gonna hear from what the foxes are going to say
If they’d any sense of shame, they should withdraw that letter
You are worried about fake letters and graphs while citizens are worried about the high cost of living.
Let us get priorities right.
………
We were telling you………
Bally wakuleka fye……..
Forwadee 2031…….
Instead of being pessimistic, let us pray that this could be a chance to get the cost of living down and the exchange rate stable.
No politics here but just being optimistic and hoping and praying that it will make a difference.
We shall wait and see if this will translate into lower exchange rate, lower fuel prices and investments to create employment.
Well done UPND. New Dawn government. Continue to persevere & you can be assured that have my vote for 2026. God willing.
We have to wait. Last time this was announced people line up from KKIA to Community house dancing in jubilation, then it turned out nothing was signed. This could another 14hrs or “I have ended load shedding one year in office”. If someone tell too many lies, it because hard to believe what they say until you tangible things.
And the regular LT noise makers are nowhere……This is too much for them.
Congrats Bally and Team !!!
Haters and Characters like Membe,Harry Kalaba,Lungu,Changala Sikota,Edith Nawakwi,ZaYellow,Tayali,Deja FOOOL,,Canisius Banda,Teresphore Mpudu,KBN TV.CAMNET Tv.Habazoka.Ayatollah,KCi and such other like minions can now hug transformer
……
Where is……. ‘My Zambia’
With his outlandish ridiculous tarven kaponya 101 suggestions ????
@KAPS..constant failure, lies, desperation and self praise is what characterises the president. He has entangled himself in more complications on his quest to score and impress. Let me congratulate Mr. Hakainde Hichilema for the 2024 Agreement after making several failed attempts. But, comrade, the dev!l is in the details.
My Zambia
I can guarantee you that soon,……..
You will be joining me in calling for more bally………..
Phew! You have done it.
Why does it seem like the deal is encouraging more commercial debt for Zambia? Can’t we concentrate on bilateral loans rather than KALOBA from market lenders? Bond A and Bond B are both unnecessary, but a clause seems to allude to directing us towards more borrowing. Why didn’t the President let the Finance Minister put the drawbacks into context before signing the 2024 Agreement? We demand a statement from parliament. I hope this opens a floor deserving parliamentary debate than opposition Lungu and PF stories
HH,a major part of the ”savings”must now be channeled toward economic diversification programs.Dont subsidize DejaFooool’s lazy stomach
This president is the only president who could negotiate this agreement. One shudders to think if Lungu was still the president.
I have also been reading the foreign press and the praise he is receiving is overwhelming.
You can be guaranteed that other countries with debt problems (e.g. Ghana) will be reaching out to him.
Zambia is so fortunate to have him.
We’ve heard this song before.
Why have you stopped talking about the petition letter, supplementar y letter taken to USA by arch MPundu,. Are they Lost? These people based on an I’m Best known by themselves, have not yet believed that HH is the president because they only expected the president to come from their group, hence extreme negativity
Since we defaulted 4 years ago, we have not paid anything towards Bonds or bilateral loans. What is there to celebrate? Now that we have restructured, repayment must begin. Where has the money allocated to debt repayment been going in the past 4 years? Despite being in debt, how were we able to give tax exemptions to the same people we owe money to, allowing them to mine our minerals for free? We are just going in circles on your merry-go-round.