Zambia suffered a major setback in its debt restructuring efforts, after the government said on Monday a revised deal to rework $3 billion of Eurobonds could not be implemented at this time due to objections from official creditors, including China.
Zambia and the country’s official creditor committee (OCC) and the International Monetary Fund (IMF) had been at odds over whether the initial deal struck with a group of bondholders in late October offered comparable debt relief from bilateral as well as commercial lenders. The IMF approved a tweaked deal, but official creditors again rejected it, Zambia said.
“The OCC, through its Co-chairs, concluded that Comparability of Treatment would not be achieved in the Base Case scenario, although would be achieved in the Upside Case scenario,” the government said in a statement, referring to a two pronged-approach that foresaw different levels of debt relief depending on the country’s economic performance.
Source: CNBC
