Bloomberg reports that Bondholder meetings to vote on Zambia’s request for debt relief were postponed today after failing to reach quorums, increasing pressure Zambia to reach agreement with its creditors before it falls into default.
The meetings will be reconvened on November 13, according to a regulatory filing.
That’s also the deadline to make a coupon payment that Zambia skipped on October 14, before it triggers a default that will give bondholders the right to demand immediate repayment of the principal.
Zambia said last month it won’t be able to meet obligations without a six-month interest-standstill agreement.
The process has been keenly watched by other poor nations seeking debt relief, as well as fixed-income investors worried about where the next potential default may be.
While Zambia said it wants to treat commercial and official creditors on an equal basis, bondholders are concerned any relief they grant would be used to service debts owed to Chinese state lenders, which account for as much as a third of its external liabilities.
“No-one is a winner without an agreement,” said Simon Quijano-Evans, the London-based chief economist at Gemcorp Capital LLP.
“The real way forward is to increase transparency and adopt a multi-pronged approach that includes bondholders, the international finance institutions and China, just like Ecuador did.”
“We have no visibility on the use of proceeds if we agree to a debt standstill,” Kevin Daly, a London-based portfolio manager at Aberdeen Standard Investments in London, which holds Zambian Eurobonds, said before the start of Tuesday’s meetings.
“We have no clarity on how they intend to restructure their Chinese debt, we have no fiscal framework to ensure debt sustainability, and they are unlikely to reach a deal with the IMF ahead of the elections.”
Zambia’s $1 billion of 2024 Eurobonds fell 0.8% to 43.9 cents on the dollar by 1:56 p.m. in London.
Please mwebasungu vote against the request.
Kajuba Mazuba But why? Are you for real? Are you really a citizen of this country?
Roy Jere Malibu yakwilombela
Kajuba Mazuba Nomba fyebale chulilamo nifwebo…la dollar naka kwela because of those debts and a bigger amount from the private sector. So when fuel is hiked we all feel it in our pockets. Dont we? So despite these guys landing us into these problems, our creditors refusing to grant is relief is something we cannot rejoice about.
Kajuba Mazuba There goes an imbecile.
Kajuba Mazuba and u think its pf who will suffer
George Mu’chi Mubanga am a well informed person as such, am aware that it’s an ordinary Zambian to suffer. Now the good part is that the suffering will not choose whether PF supporters or opposition supporters and that way, even dull blind PF supporters will wake up from the slumber and vote out these failures crocks
NO RELIEF PLEASE THIS COUNTRY MUST LEARN TO STAND ON ITS OWN 2 FEET
Even if it defaults, Zambia doesn’t have enough assets to cover this debt so how will the debtors recover the money?
Ati all sectors of the economy are doing well…..
We have been hearing about this word default for months now. Still nothing has happened. We wake up every day and life goes on.
we have copper, gold and emeralds. We can even sell weed this time around. So even if we default we have assets as colateral thats why they keep on giving us money
They have no option but to postpone the payment
Zambia said last month it won’t be able to meet obligations without a six-month interest-standstill agreement.
Where is Zambia going to get the money to meet interests payment in six months, when they cannot find money now?
” We have no visibility on the use of proceeds if we agree to a debt standstill and We have no clarity on how they intend to restructure their Chinese debt, we have no fiscal framework to ensure debt sustainability, and they are unlikely to reach a deal with the IMF ahead of the elections”.
They are building roads and hospitals in Chilubi. Taking advantage of a place’s name to lie to the population there is not a good thing at all! Osamvelela imwe namwe a tubulu!
Present a posture of confidence since you claim to be sovereign and self made. We advised you to practice fiscal discipline and mocked Zambians who are poor.
Zambia under pf watch is on its kneels because of financial indiscipline
I hope it doesn’t come to this. It could trigger a currency crisis and several insolvencies could ensue.
Continue praying for bad to happen to our country. You won’t manage because the lord has always being on Zambia side. You will die angry uko ku diaspora
Mwalilungusha bamambala imwe
bamwankole efyo baba…but please if u are benefiting greatly in pf,continue ukushanina ubwali and just keep quiet,other than trying to convice and fool everyone that things are okay,even when they are not.We dont want political driven problems
People are against this refief because it will only give lungu more money to bribe voters , but more anti riot weapons and more money to pay his thugs to continue brutallising the opposition…..
End game! Bupilo bwa likoloti ki bukuba!
End game! Bupilo bwa likoloti ki bukuba!!!!!!!!!!!!!!
Incompetence leadership at it. They even boasted that twabanyankula ba opposition in parliament when these mwankole supported increase on debt threshold. My question is why asking for 6 months suspension of debt payment when they lied to me that debt was sustainable when we were against voting for raising debt threshold. Ukuteka chalk tekwabana iyo. You need people with brains, not ba group 3.
Incompetence leadership at it. They even boasted that twabanyankula ba opposition in parliament when these mwankole supported increase on debt threshold. My question is why asking for 6 months suspension of debt payment when they lied to me that debt was sustainable when we were against voting for raising debt threshold. Ukuteka chalk tekwabana iyo. You need people with brains, not ba group 3.
What pains me is when I wake up to such news , Mwanawasa MHSRIEP worked extra had in the area of fiscal discipline, hope we all remenber the famous HIPC song, we tightened our belts both opposition and in power and together with love we conqured and won…today we are back to square one….70% of our budget goes to debt servicing while only 30% remains for government activities…