Zambia External Bondholder Steering Committee Reaches Agreement in Principle with Zambia on Debt Restructuring

LONDON, Oct. 26, 2023 /PRNewswire/ -- The Zambia External Bondholder Steering Committee ("the Committee") is pleased to announce that it has reached an agreement-in-principle with the Government of Zambia (the Government) on a restructuring of Zambia's (i) US$750,000,000 5.375 per cent. Notes due 2022, (ii) US$1,000,000,000 8.500 per cent. Notes due 2024 and (iii) US$1,250,000,000 8.970 per cent. Amortising Notes due 2027 (collectively the "Eurobonds").

The proposed agreement will provide the Government with significant cash flow and debt stock relief to support a restoration of macro-economic and debt sustainability in the context of the IMF-financed programme and cure the long-standing default on the Eurobonds. The proposed restructuring terms provide both substantial up-front debt relief and future relief commensurate with Zambia's economic progress in the next few years, with enhanced repayment terms and higher coupons on one of the two new Eurobonds to be issued in the event that Zambia's debt carrying capacity, as assessed by the IMF and World Bank's Composite Indicator, moves to medium from weak or Zambia continues to meet or exceed current IMF projections as measured by exports of goods and services and fiscal revenues measured in US Dollars.

This approach is consistent with the agreement recently reached with Zambia's Official Creditor Committee.

The Committee appreciates the collaborative and transparent discussions with the Government that have allowed for an agreement-in-principle to be reached. Furthermore, the Committee is pleased to have been able to support the Government as it implements its economic reform programme for the benefit of all Zambians.

A spokesperson on behalf of the Committee said: "We are pleased to have reached an agreement-in-principle with the Government which will, in due course, restore full international capital markets access to Zambia and encourage long-term investment in the country, to the benefit of all Zambians. The proposal represents an innovative and sustainable solution that we hope will set a positive precedent for future sovereign restructurings under the Common Framework."

The key elements of the agreement-in-principle are contained in the Government's press release. Implementation of the agreement-in-principle is conditional on mutual agreement on deal documentation and the objective is to fully implement the agreement before year-end.

The Committee encourages all holders of the Eurobonds to carefully consider the terms of the Government's prospective offer in relation to the agreement-in-principle, and to make their own independent appraisal of the merits and risks of participation.

Members of the Committee include the following asset managers (acting either directly or on behalf of funds or other accounts they manage): Amia Capital LLP; Amundi (UK) Limited; RBC BlueBay Asset Management; Farallon Capital Management, LLC; Greylock Capital Management, LLC.

The Creditor Committee is being advised by Newstate Partners and Weil Gotshal & Manges (London) LLP.

Questions can be directed to: Spencer Jones, Newstate Partners LLP, +44 20 3077 4916 or sjones@newstatepartners.com Annie Emery, Newstate Partners LLP, +44 20 3077 4915 or aemery@newstatepartners.com Andrew Wilkinson, Weil, Gotshal & Manges (London) LLP, +44 20 7903 1068 or andrew.wilkinson@weil.com

For media enquiries: Greenbrook, +44 20 7952 2000, zambia@greenbrookadvisory.com