SOVEREIGN DEBT RESTRUCTURING | MASTERCLASS

A deep dive masterclass on sovereign debt restructuring, to be conducted virtually by Asian high yield bond expert Florian Schmidt.

30 June 2022 (Thu), 5pm Singapore/HK time

Zambia’s main opposition leader said that creditors would have to face losses while negotiating a debt restructuring, given that the African nation would not be able to secure an IMF bailout before elections in August. The opposition leader said that a 20% haircut/loss is a good starting point following Barclays’ forecast that creditors including Eurobond holders would exit the restructuring with a 20% haircut. The IMF had said earlier this month that it has made significant progress with Zambia and talks would continue. Zambia’s external debt stood at $12.74bn as at 2020 end with ~$3.5bn outstanding to Eurobond holders. “We would go to the table with clean hands, with credibility… There has to be a haircut. It has to be equitable. We don’t want one group of creditors holding debt stock to cross subsidize another”, said Hakainde Hichilema, president of the United Party for National Development.

Zambia’s USD 8.97% 2027s and USD 8.5% 2024s were trading stable at 57.4 and 58.1.

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