Zambia adjourns meetings for three series of notes to November

By Rebecca Melvin

New York, Oct. 20 – Zambia said its Oct. 20 meetings of holders of three series of notes have been adjourned to November due to a lack of quorum.

With respect to Zambia’s:

• $750 million of 5 3/8% notes due 2022 (ISINs: XS0828779594, US988895AA69), the meeting has been adjourned to 5 a.m. ET on Nov. 13;

• $1 billion of 8˝% notes due 2024 (ISINs: XS1056386714, US988895AE81), the meeting has been adjourned to 5:15 a.m. ET on Nov. 13; and

• $1.25 billion of 8.97% notes due 2027 (ISINs: XS1267081575, US988895AF56), the meeting has been adjourned to 5:30 a.m. ET on Nov. 13.

A quorum of at least one-third of the holders of the notes is needed to approve the changes. Holders who approve the changes will receive a consent fee of $0.50 per $1,000 bond, and future interest payments will be reduced by an amount equal to the consent fee.

Specifically, the sovereign is seeking to defer payments for six months to April 14, 2021. The standstill period was set to begin Oct. 14, and breach or alleged breach of obligations under the notes will be waived. All other modifications being sought are deemed necessary to put the interest deferral into effect.

Under Zambia’s third amended and restated credit agreement all of its external creditors to agree to debt service suspension on the same terms while the government conducts a debt sustainability analysis in conjunction with the International Monetary Fund and its creditors.

Zambia said the debt service suspension of all external debt is necessary due to challenges and liquidity problems compounded by the Covid-19 pandemic. It has negotiated debt service suspension agreements under the G20 debt service suspension initiative with all its official creditors and has requested this also from commercial creditors.

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