Zambia secured a $1.3bn bailout package approval from the IMF, a key step towards the nation restructuring its debt under the G-20 debt plan. Based on Zambia’s economic reforms plan, the IMF has given a 38-month extended credit facility (ECF). The lender said, “The program will catalyze much-needed financial support from development partners, enabling an immediate disbursement equivalent to about $185 million.” Zambia defaulted on its debt during the pandemic in 2020 and was seeking an IMF deal as its external liabilities grew $17.3bn in 2021. Chinese lenders hold 33% of Zambia’s dollar debt. Zambia applied to restructure its debt under the G-20’s Common Framework guidelines (G-20), which brings together members of the Paris Club creditor nations, and China, its biggest official lender. Zambia still needs to negotiate with private creditors including bondholders holding $3bn of its Eurobonds.
Zambia’s bonds are currently trading at levels of around 61-62 cents to the dollar.
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