A group representing many holders of Zambian Eurobonds has rejected a government request to delay interest payments until April, but said it was ready to look at a potential bond swap.
Zambia, one of the world’s largest copper producers, had been wrestling with growing public debt even before the coronavirus pandemic forced lockdowns and cut demand.
Last week it proposed deferring interest payments on its three outstanding dollar-denominated bonds to give it time to finalise a debt sustainability analysis and sketch out the parameters of a restructuring plan.
“While the Committee stands ready to engage constructively and proactively on finding ways to support Zambia, its members are unable to provide a positive response,” the Zambia External Bondholder Committee, which holds a blocking stake, said.
The committee said the government had not engaged with the group since its formation in June and that the budget presented to parliament last Friday moved the country further away from a path to debt sustainability with long-standing fiscal imbalances not being addressed.
The committee consists of 14 U.S. and Europe-based financial institutions which hold in aggregate some 40% of Zambia’s outstanding Eurobonds, including at least 25% in each of its three outstanding Eurobonds.