By SIMON MUNTEMBA
THE Zambia External Bondholder Committee has welcomed the announcement that the International Monetary Fund (IMF) and the Zambian authorities have reached a staff-level agreement on an extended credit facility in an amount of about.
The Committee has congratulated the authorities on the positive progress to restoring macro-economic stability and improving the foundation for further economic recovery.
In a statement by committee member Mr Spencer Jones yesterday, the committee members said they were now looking forward to the authorities engaging in a prompt, transparent and proactive manner with the Committee on how to cure the defaults on the outstanding Eurobonds, which have persisted since November 2020.
Most importantly, he said, and in line with the new administration’s frequently stated commitment to transparency, comprehensive information on the macro-economic assumptions and projections underlying the SLA will be required for bondholders to consider the terms of any debt relief.
Mr Spencer said inter-creditor equity should also be of paramount importance in the authorities’ approach to restoring debt sustainability.
He said in order to establish a process in which all parties have confidence, the Committee expects the authorities to engage in simultaneous discussions with the Official Creditor Committee for Zambia and the Bondholder Committee with equality of information disclosure for both groups.
“On this basis, the Committee looks forward to engaging with the authorities in a good faith and collaborative manner in the coming weeks to seek a consensual resolution to the debt default that will allow for a faster and more resilient economic recovery, as well as reopen market access to provide much needed financial resources to support development of the Zambian economy.
“The Committee was formed in late June 2020 to engage with Zambia and its advisors with regard to how bondholders can support a restoration of macro-economic and debt sustainability and now consists of 16 international financial institutions based in the US and Europe and in aggregate holds around 45% of the total amount of Zambia’s outstanding Eurobonds, including at least 25% in each of its three outstanding Eurobonds,” he said.
Committee members include a large number of fund managers that have been investing in Zambian debt, both external and domestic, for many years.
The Committee has appointed Newstate Partners LLP as its financial advisors and Weil as its Legal advisors.
Bondholders welcome Zambia, IMF deal
