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Zambia says International bond deal can’t be implemented at this time !

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FILE PHOTO: Zambia Finance Minister Situmbeko Musokotwane attends the Annual Meetings of the International Monetary Fund and World Bank in Washington, U.S., October 15, 2022. REUTERS/James Lawler Duggan/File Photo

Zambia suffered a major setback in its debt restructuring efforts after the government said on Monday a planned 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) had been at odds over whether the deal struck with a group of bondholders in late October offered comparable debt relief from bilateral as well as commercial lenders.

“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.

The country’s External Bondholder Steering Committee said it was deeply concerned with recent developments and frustrated by the current process.

The country’s international bonds dropped nearly 2 cents following the statement, Tradeweb data showed.

Credits: (Reporting by Rachel Savage, Bhargav Acharya and Karin Strohecker, Editing by Alexander Winning) CNBC AFRICA