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Zambia initiates Eurobond consent solicitation as next step in debt restructuring process


Zambia has initiated consent solicitation concerning its outstanding Eurobonds, marking the next phase in the country’s debt restructuring process.

The consent solicitation encompasses US$750 million notes due in 2022, US$1 billion notes due in 2024, and US$1.25 billion notes due in 2027.

Read more: Secretary to Treasury, Nkulukusa, sheds more light on debt restructuring journey, as IMF notes progress

Ministry of Finance and National Planning Secretary to the Treasury, Felix Nkulukusa, announced the move through the London Stock Exchange on Monday.

The comprehensive statement on consent solicitation outlined Zambia’s debt situation and the necessary steps along with timelines.

According to the statement, the consent solicitation represented the subsequent stage in Zambia’s debt restructuring with Eurobond holders, following the Agreement in Principle (AP) reached with the government and the Steering Committee of the Ad Hoc Creditor Committee.

The statement highlighted the commercial terms of the proposed restructuring transaction regarding the government’s bonds due in 2022, 2024, and 2027, agreed upon in March 2024.

Furthermore, the statement detailed the mandatory exchange of existing notes totaling US$3 billion and accrued interests for new notes, designated as A and B.

For instance, the outstanding principal amount of US$750 million and accrued interest on the 2022 notes, totaling US$142,325,521, would now be exchanged for US$389,924,112 and US$309,645,618, respectively.

Similarly, under the 2024 notes, the US$1 billion principal and accrued interest of US$336,930,556 would be exchanged for US$584,205,480 and US$463,927,881.

Regarding the 2027 notes, the US$1.250 billion principal and accrued interest of US$411,125,000 would be exchanged for US$725,870,408 and US$576,426,501.

The statement indicated that the consideration would be delivered to the clearing systems on the settlement date, and the draft terms and conditions of the new A and B notes were outlined in the memorandum.

June 4, 2024, was tentatively set for the meeting according to the statement.

“Holders of the Existing Notes are advised to check with any bank, securities broker, or other intermediary through which they hold Existing Notes when such intermediary would need to receive instructions from a Noteholder in order for that Noteholder to be able to participate in the Consent Solicitation before the deadlines,” the statement concluded.

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