Fitch Ratings has downgraded Zambia’s Long-Term Foreign-Currency Issuer Default Rating (IDR) to ‘C’ from ‘CC’.
Fitch has also downgraded the ratings on Zambia’s senior unsecured foreign-currency bonds included in the “consent solicitation” to ‘C’ from ‘CC’.
This includes all of the foreign-currency bonds rated by Fitch.
Fitch typically does not assign Outlooks or apply modifiers for sovereigns with a rating of ‘CCC’ or below.
The downgrade reflects Fitch’s view that a sovereign default will follow the “consent solicitation” issued by the Zambian government on suspending debt service payments on its three outstanding global bonds.
A suspension in payments, if agreed to by bondholders, would constitute a distressed debt exchange (DDE) in Fitch’s view.
“Fitch deems this formal request to be the initiation of a default-like process, consistent with a ‘C’ rating. Should majorities of creditors agree to the request at the thresholds specified in collective action clauses, the payment standstill would constitute a DDE under Fitch’s criteria given that it entails a material reduction in terms and is needed to avoid an outright default,” it said in a statement.
The government has indicated that they will continue to make debt service payments on outstanding Eurobonds if an agreement is not reached.
Fitch however judges that there is a high risk of a missed debt payment over the forecast horizon.
“The sovereign’s already constrained external liquidity was exacerbated by the shock from the coronavirus pandemic.
Fitch downgraded Zambia’s rating to ‘CC’ on 16 April to indicate the increasing likelihood of a default event as a result of these pressures.
Who takes these imperialist ratings seriously? An old imperialist decides to grade countries based on his own subjective analysis of a country’s economic performance. We don’t take such seriously. In the west millions have lost their jobs and their economies are being kept alive by excessive borrowing and yet they will tell you that countries like USA and UK still have A and Astar ratings. Oh please you cannot f00l us anymore. Maybe those evil diasporans who worship the old whlte imperialist will take such as gospel truth because they have been brain washed and suffer from inferiority complex. An A grade does not feed people. Voestek!!!!!
Who asked you to join their rating club? You can start your own but what stops you? Exactly what you are accusing others of: your inferiority complex that makes you think you have to do only what the white man has initiated. Africans always want white people to initiate everything for them. Why be with Fitch? You will remain slaves of your imperialist masters.
You claim to be part of a government that voluntarily joined Fitch’s rating. You cant see that the solution lies with you but are just busy pointing fingers at so called diasporans. Kenneth Kaunda when fighting for freedom told Zambians not to be divided in the battle against bamwisa. You are intent on dividing us and expect to win against the imperialist? Yayi bambo
Ba LT Lekenifi!
LT doesn’t know how these things work. We hv been junk status for quite a while.
Bancums!! If you ask who …I mean the bancums that got us into this mess
TO HELL WITH THE RATINGS AGENCIES.
THE USA CAN PRINT 2 TRILLION DOLLARS AND NOBODY BAT’S AN EYE LID BUT ZAMBIA OWES 10 BILLION DOLLARS AND ALL HELL BREAKS LOOSE.
AND YET WE HAVE ALL THOSE RESOURCES SOMETHING IS CERTAIN THOUGH. hh WILL NEVER RULE IN ZAMBIA.
TO HELL WITH THE RATINGS AGENCIES.
THE USA CAN PRINT 2 TRILLION DOLLARS AND NOBODY BAT’S AN EYE LID BUT ZAMBIA OWES 10 BILLION DOLLARS AND ALL HELL BREAKS LOOSE.
AND YET WE HAVE ALL THOSE RESOURCES SOMETHING IS CERTAIN THOUGH. hh WILL NEVER RULE IN ZAMBIA.!!
KZ, supposing they gave Zambia AAA+ rating , were you not going to be the first one with “excellent ” things ?
We know we have political interest but lets be serious sometime and avoid being in denial
And someone wants to be reelected? If this was a CEO in a company, he would be looking for a job by now!
KZ
Why are you going begging for bailouts fron the same people who grade you ???
Hehehehe…..
So which country is doing well for Fitch?
Tanzania. Apparently they are doing so well they are almost completely out of the woods.
Spaka show evidence of Zambia asking for bail out. Do you understand what suspension of debt repayment means? You are very dull. Suspension does not mean default. It means for 6 months we do not pay back what is owed and then after that we will resume. Economic climate at the moment, this is normal and many countries are doing so. Do you know what the UK and USA debt is? You live in those countries thinking it is heaven on earth. Do your research you coon
It seems our govt is much more comfortable with our largely ignorant people. If they were sincere and honest in their dealings they would be transparent enough to allow local consultants guide them. It is shameful that we have so many citizens that know absolutely nothing about our debt A responsible govt would use it’s exciting structures Nationwide to sensitize the nation as they already have presence in every province. We are not short of human resource. It can be done.
The G8 is in recession so are many major economies. Why should Zambia be unique or special?? Let’s work on our local solutions and we will prosper.
These id.iots are friends of mr Kalusa hakaivotela huumwine…You deceived us during kk times by painting a bad picture about the then government with plans of destroying the manufacturing sector.
PF are famous failures and you still want to rule.
Just as Dr.Situmbeko Musokotwane feared.These are the consequences of copy and paste policies.Just because everyone is asking for a suspension we should also ask not minding that each economy has different fundamentals thus evaluated differently.For Zambia, requesting a debt service suspension is shouting loudly that default is imminent.
Foolish Zambians supporting a failed party because they are your tribesmen. You can bury your heads in the sand but that can not take away your junky downgrade. PF will never take you anywhere, it has failed. if only you knew the imprecations of junky-no borrowing, no development, no foreign investments, no jobs. The worst is still to come, hunger has no tribe, you persist you eat your sh**t.
Very low economic growth, high debts ,large deficits = Lungu’s written formular for junk status .The signs have been there since 2015.
KZ
You are a very du.ll person.
And you advise lungu ?????
That’s why Zambia is screwed……
Dont you know the same people who grade you, controll and own the IMF where you are begging for a bail out ??
You can’t hide your pathetic performance behind words, ….
failing to pay/ debt rescheduling/ breathing space / have no money
Mean the the same thing….Zambias economy is screwed….
Now some of rats are pointing out the the USA/UK are also borrowing , but they are not pointing out that those countries make planes , they make satellites for space…….
This zambian citizen is a serious chikopo. Yaba no skopo. Ati loco solution and we will prosper. Ku kamba iri ize. Local what? We import everything including your bamba iwe.
My question is why is Kaizar Zulu given so much space on LT talking nonsense such time I read the times. And yet there is no police call out ever….why….because he’s a friend to ECL. Nevers Mumba just pointed out some irregularities in the just ended by elections and to ask for the dissolution of the ECZ and police are busy threatening and warning him. KZ has been insulting his fellow Zambians abroad working hard for mother Zambia and nothing happens. I hope ba incoming Presido HH will deal with this *****. Viva UPND. We seriously need change in our country for us to move forward. PF MUST GO at all costs.
This is a very serious devt to those are Economic and Financial literate. This suspension of debt interest payments is a signal that Zambia is under Debt stress and could default on its debt servicing and repayments very soon. With Elections in August 2021 an expansionary fiscal policy to finance those Elections will result in higher inflation and further depreciation of the Kwacha. The 2021 Economic outlook for Zambia doesn’t look good hence Fitch’s downgrading. Time will tell.
Fitch or Futseki, whatever they are called should not be taken seriously. They are part of the agenda to distabilise African countries from progress. First, we should ask ourselves who are the people behind these companies. They just want to put pressure on the kwacha to deflect on what’s happening in their own back yard.
The answer is simple. So called kaizar Zulu is among the editors of this website
The Junk status reflects the leadership directly
When the rating agencies rated Zambia well and PF went on a borrowing spree, you don’t call them imperialists.
Ati to hell with rating agencies. Unga seke koma. you are sinking ati to hell with water!!
Incompetent leadership. It’s a shame to say you belong to Zambia out there. Managing a population that’s just under 20m is an issue: what’s going on? Politicians stealing more money than they are spending on the nation. No investments just theft. It’s a shame and we won’t allow this nonsense to continue.
As long as Zambia has foolish *****s like Kainyokolola Zulu in power, we are doomed as a country. I mean, the *****ic fool does not see the link between the imminent default in the Euro bond and the Fitch Downgrade. You bet even Mvunga is clueless, these Chipatans, is it the rats they eat dementing them like this?
It’s beggars belief that some bloggers really think the likes of Futseki are there to hug and kiss them. The only way Zambia will ever develop is when it’s got control of it’s own destiny. If you are waiting for the imperialist to bring you civilization then you will wait till you drop. These people have been on your soil for over 400 years.
Junk status. It’s an apt description of the way Patriotic Front has governed our country into the gutter. What an absolute disgrace. Just look at the Kwacha. No one will touch us with a ten foot pole while Lungu is still role playing a leader.