Zambia Bonds Jump as Revamp Gets Traction With China, India Deal

(Bloomberg) -- Zambia’s dollar debt jumped after its government said over the weekend that China and India, the last two nations needed to sign a deal to restructure Zambia’s debt, have done so.

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The price of the nation’s $1.25 billion of notes due 2027 climbed by the most in a day since October. They were trading at 68.58 cents on the dollar as of 9:44 a.m. in London, the highest level since June 2022.

“China and India agreeing on terms means that we can get on with the private-creditor restructuring,” said Sam Singh-Jami, Africa strategist at Rand Merchant Bank. “We are now a step closer for Zambia to restructure all of its external debt in a very protracted process.”

“We’re getting there,” President Hakainde Hichilema said Saturday on Zambian state-owned television. “Now we are turning our attention to the private creditors.”

Zambia reached a memorandum of understanding with official creditors to restructure $6.3 billion of debt in October. The government is in talks with other creditors, including the holders of $3 billion in outstanding eurobonds. The discussions have been deadlocked since November, when the Official Creditors Committee — co-chaired by France and China — rejected a deal in principle the administration reached with those investors.

The southern African nation signed up to use the so-called Common Framework to restructure its debts three years ago, after defaulting in November 2020.

READ: Zambian President Says China and India Signed Debt-Revamp Deal

--With assistance from Matthew Hill.

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