In this series of the Kwacha Arbitrageur credit note, we focus on the recent landmark dollar bond restructure proposal for Zambia and the associated expected foreign currency issuer rating upgrade. In the week leading to the Easter festivities, the authorities in the Southern African nation announced a breakthrough with the bondholders’ steering committee on the reorganization of $3.05 billion worth of outstanding eurobonds, which constituted a significant portion of private debt. Successfully restructuring these obligations means that Zambia would have addressed 77% of its debt, leaving $3.4 billion in non-bondholder private debt owed to the Chinese and others pending. The…
Author: The Editor
As Easter approaches, Zambia, Africa’s second-largest copper producer, achieves a significant milestone with news of the restructuring of its dollar bonds. In principle, Zambia has agreed with the bondholder committee to issue two new bonds maturing in 2033 ($1.7 billion) and 2053 ($1.35 billion), effectively reorganizing its outstanding Eurobond debt. This marks the second proposal following the November 2023 agreement, which initially faced reservations from the Official Creditor Committee (OCC) and the International Monetary Fund (IMF) regarding comparability of treatment concerns. However, both parties have now given their approval, signaling a positive shift in Zambia’s sovereign outlook prospects. READ ALSO: Zambia in International Capital Market ‘Come Back’ after Historic…
Africa’s second largest red metal producer Zambia will be making a fresh appearance in the international capital markets with a re-issuance of fresh bonds following a historic bond restructure consensus reached with Eurobond holders. Tainted the first nation to default in COVID pandemic era, Zambia will be the first nation to restructure debt involving different creditor classes under the G20 Common framework. A quarter of a year ago in November, the red metal producer hit a snag after the International Monetary Fund (IMF) and the Official Creditor Committee (OCC) expressed reservations on an in principle deal the Zambia authorities earlier…
Africa’s second largest red metal producer Zambia will be making a fresh appearance in the international capital markets with a re-issuance of fresh bonds following a historic bond restructure consensus reached with Eurobond holders. Tainted the first nation to default in COVID pandemic era, Zambia will be the first nation to restructure debt involving different creditor classes under the G20 Common framework. A quarter of a year ago in November, the red metal producer hit a snag after the International Monetary Fund (IMF) and the Official Creditor Committee (OCC) expressed reservations on an in principle deal the Zambia authorities earlier…
As Easter approaches, Zambia, Africa’s second-largest red metal hotspot, anticipates a short week ahead with markets closing from Friday, March 29th to Monday, April 1st. This week brings optimism surrounding recently announced eurobond restructuring, the third Kwacha bond sale of 2024, March inflation data released by the Zambia Statistics Agency, and April petroleum price announcements by the Energy Regulation Board. READ ALSO: On the Cusp of Debt Restructure, Zambia Restarts Negotiations with Dollar Bondholders Here are some insights into these pre-Easter market developments: DEBT DEAL TO GIVE KWACHA A POSITIVE CUEAs an early Easter gift, Zambia has reached an agreement…
Markets in Africa’s second largest copper hostspot, Zambia are gripped with optimism as its authorities restart negotiations with dollar bond holders. This follows a stand off in November last year when an agreement in principle was opposed by the Official Creditor Committee led by China and France, and the International Monetary Fund on the back on comparability assymetries. The two parties expressed discomfort on the incompatbility with the G20 Common framework principles that require that all creditors be treated equally. This was despite the proposal meeting the debt sustainability thresholds set by the Washington based lender, the IMF. Early the…
Africa’s red metal hotspot Zambia continues to make strides to ramp its copper production, with the most recent being handover of Mopani Copper Mines to its new majority shareholder. Head of State President Hakainde Hichilema on 21 March handed over the mine to new majority shareholder International Resources Holdings of the United Arab Emirates in a $1.1 billion book valued deal. This transaction has dawned the sun on a mining town of Kitwe, home to key red metal operations that has seen a slow down in view of exit of former shareholder Glencore Corporation. READ ALSO: Mining Outlook gets Positive…
It is about a dry point of construction that Africa’s second largest red metal hotspot is a critical stage of its economic life cycle. Zambia is not only on the cusp of a debt restructure completion but is grappling with numerous headwinds. Starting the year with a cholera outbreak, rising inflation and a depreciating currency, the Southern African nation more recently declared as a national disaster spiraling into 50.0% of corn fields damaged and a forecast power deficit as precipitation woes heighten. Zambias central bank on 05 February shocked the market with an early valentines gift of 900 basis points…
On 29 February, Republican President in Africa’s second largest copper producer Zambia, His Excellency Hakainde Hichilema declared drought as a national disaster and emergency. The declaration follows erratic precipitation as a consequence of widening El – Nino effects earlier forecast by the Famine Early Warning Networks Systems in 2023. The wave of El – Nino is projected to persist to the end of 2024 into early 2025 and will likely have adverse impact on rainfall intensity in Southern Africa. The Ministry of Agriculture estimates that of 2.2 million hectares of planted maize, 50% has thus far been destroyed and is…
The central bank in Africa’s second largest copper producer, Zambia on 26 February 2024, launched its debut monetary policy committee report. This was to aid with transparency of the deliberations of the rate decision meeting. The intiative comes as part of implementation of the new Bank of Zambia (BOZ) Act that will see the central bank align to global best practice. Speaking at the launch, Governor Dr. Denny Kalyalya took the initiative to explain the recent monetary policy tightening measures that included hiking of the cash reserve ratio by 9% to 26% which extended to vostro accounts and idle government…