IMF releases $187m Zambia payout amid $3bn bond revamp
The IMF board has granted immediate approval for a $187 million loan disbursement to Zambia, which is in the process of revising a restructuring proposal for $3 billion of bonds that was previously rejected by official creditors last month.
This loan disbursement represents the third payout under Zambia's $1.3 billion Extended Credit Facility arrangement, which was approved in August 2022. According to a Q&A document on the IMF's website, Zambian authorities are actively refining their Eurobond restructuring proposal to align with the comparability of treatment requirements set by official creditors.
Despite notable progress, the IMF acknowledges that further adjustments are necessary to satisfy both program parameters and the comparability of treatment, as stipulated by official bilateral creditors.
Key Takeaways
Zambia, a prominent copper producer in Africa, encountered a debt default three years ago amid the challenges posed by the COVID-19 pandemic. Since then, its attempts at restructuring have faced significant delays. In November, Zambia faced a setback when its official creditors turned down a preliminary restructuring agreement with bondholders, citing concerns about whether it provided debt relief on par with what had been previously agreed upon. Mercedes Vera Martin, the International Monetary Fund's mission chief for Zambia, conveyed to reporters in a conference call that the conditions determining the "comparability of treatment" were still under consideration by Zambia's Official Creditor Committee (OCC). This underscores the ongoing complexity and challenges in reaching a consensus on the terms of Zambia's debt restructuring efforts.
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