Zambia fails to pass extraordinary resolutions for three note series

By Cady Vishniac

Detroit, Nov. 13 – Zambia said it failed at to get sufficient support for extraordinary resolutions on three series of notes at three separate Nov. 13 adjourned meetings of noteholders.

Zambia had asked for the extraordinary resolutions to defer payment on its:

• $750 million of 5 3/8% notes due 2022 (ISINs: XS0828779594, US988895AA69);

• $1 billion of 8˝% notes due 2024 (ISINs: XS1056386714, US988895AE81); and

• $1.25 billion of 8.97% notes due 2027 (ISINs: XS1267081575, US988895AF56).

A quorum of at least one-third of the holders of the notes was needed to approve the changes. Previous meetings on Oct. 20 were adjourned due to the lack of a quorum at the meeting for each series of notes.

Holders who approve the changes would have received a consent fee of $0.50 per $1,000 face amount of notes, with future interest payments reduced by an amount equal to the consent fee.

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

Under Zambia’s third amended and restated credit agreement all of its external creditors must 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 also requested this agreement from commercial creditors.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.