Zambia's dollar debt soared over the weekend after the Zambian government announced that China and India, the last two countries needed to reach a deal to restructure Zambia's debt, had signed.
The price of $1.25 billion of domestic government bonds due in 2027 was the biggest one-day increase since October. As of 9:44 a.m. in London, the dollar was trading at 68.58 cents, the highest since June 2022.
“The fact that China and India have agreed to terms means that the restructuring of private creditors can proceed,” said Sam Sinjami, Africa strategist at Rand Merchant Bank. “Zambia is one step closer to restructuring all of its external debt in a very long process.”
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“We are getting there,” President Hakainde Hichilema said on Zambian state television on Saturday. “Right now we are looking at private creditors.”
Zambia signed a memorandum of understanding with official creditors in October to restructure $6.3 billion in debt. The government is in talks with other creditors, including holders of $3 billion in outstanding Eurobonds. Discussions have been stalled since November, when the official committee of creditors, co-chaired by France and China, rejected the outline deal the administration had reached with those investors.
The southern African country signed a deal three years ago to use the so-called Common Framework to restructure its debt after defaulting on its debt in November 2020.
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