Zambia has agreed on a revised deal to restructure nearly $4bn in US dollar bonds with private investors, moving the bankrupt southern Africa nation closer to exiting a years-long default after months of tensions between China and other creditors. Under the new deal bondholders will take a cut to the face value of their claim worth $840mn, up from $700mn under the initial agreement. That has increased the direct “haircut” taken by bondholders from 16 per cent to 22 per cent of their overall claim, based on the 5 per cent discount rate that official creditors are using to judge the value of cash flow relief in the restructuring, people familiar with the matter said. Bondholders will also extend repayment dates and provide payment relief, enabling Zambia to continue receiving funds under a $1.3bn IMF bailout. Zambia’s previous deal with bondholders collapsed in November after official creditors led by China said the terms did not compare with the relief they were already offering.
