Zambia on Thursday successfully issued the targeted amount of US$1.25 billion Eurobond for infrastructure development.
The Eurobond, with a coupon rate of 8.97 per cent, has an eleven-year average life with repayments in 2025, 2026 and 2027.
According to the statement released to the media by First Secretary for Press and Public Relations for Zambia at United Nations, Mr Chibaula D. Silwamba, this issuance is in line with prudent debt management practices of the Government of the Republic of Zambia that will ensure a sustainable debt redemption profile.
The bond issuance that is in excess of two times oversubscribed, demonstrates investor confidence in the economic governance of country.
Finance Deputy Minister Honourable Christopher Mvunga, who led the Zambian delegation, said this success demonstrates confidence that the international financial community has in the leadership of His Excellency, Mr. Edgar Chagwa Lungu and the Patriotic Front (PF) Government.
“As the case has been in the past, the funds will be used in infrastructure related projects in the area of road, energy, education, health, water and transport sectors in order to better the lives of the Zambian people,” Mr. Mvunga said.
The Minister emphasized that the Government would strictly adhere to the programmed use of the resources.
“The fiscal consolidation measures outlined to the investors in the presentations will strictly be adhered to,” he said.
Mr. Mvunga said this was an opportune time for Zambia to issue bonds given the anticipated rising interest cost in the international markets in the near future.
Despite a challenging capital markets environment arising from global economic uncertainties, Zambia’s bond issue was met with high demand from international investors allowing the country to lock-in a competitive interest rate.
The Zambian delegation met over 60 fund managers during the five-day road show in the United Kingdom and the United States of America.
Mr. Mvunga committed that going forward, Zambia will conduct annual investor meetings to ensure transparent communication of the performance of the economy.
The delegation included the Secretary to the Treasury Fredson Yamba, Special Assistant to the President (Project Monitoring and Implementation) Lucky Mulusa, Permanent Secretary (Budget) Pamela Kabamba, the Deputy Governor of the Bank of Zambia (Operations) Bwalya Ng’andu and senior Government officials from the Ministry of Finance and the Bank of Zambia.