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The Republic of Zambia - Consent Solicitation 2024 (US/XS) - Early Results

THE REPUBLIC OF ZAMBIA - RESULTS OF VOTING ON THE CONSENT SOLICITATION AS AT THE EARLY CONSENT DEADLINE - XS0828779594 - US988895AA69 - XS1056386714 - US988895AE81 - XS1267081575 - US988895AF56

28 MAY 2024


Full announcement, including restrictions and disclaimers, available via Lonse


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"Zambia is pleased to announce that, as at the Early Consent Deadline of 5:00 p.m. (New York City time) on 24 May 2024, the following Voting Instructions have been validly submitted and received by the Information and Tabulation Agent:


On the basis of the Voting Instructions received as at the Early Consent Deadline, Zambia expects that the Meetings will be quorate and that each of the Extraordinary Resolutions in respect of each Series of Existing Notes will be approved at the relevant Meeting."


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THE REPUBLIC OF ZAMBIA - LAUNCH OF A CONSENT SOLICITATION IN RESPECT OF OUTSTANDING NOTES - XS0828779594 - US988895AA69 - XS1056386714 - US988895AE81 - XS1267081575 - US988895AF56

13 MAY 2024


Full announcement, including restrictions and disclaimers, available via Lonse


The Republic of Zambia, represented by the Ministry of Finance of Zambia (the "Issuer" or "Zambia") is pleased to announce the launch of a consent solicitation (the "Consent Solicitation") in respect of its:

·    U.S.$750,000,000 5.375 per cent. Notes due 2022 (Regulation S ISIN: XS0828779594, Common Code: 082877959; Rule 144A ISIN: US988895AA69, CUSIP: 988895AA6) (the "2022 Notes");


·    U.S.$1,000,000,000 8.500 per cent.  Notes due 2024 (Regulation S ISIN: XS1056386714, Common Code: 105638671; Rule 144A ISIN: US988895AE81, CUSIP: 988895AE8) (the "2024 Notes"); and


·    U.S.$1,250,000,000 8.970 per cent. Notes due 2027 (Regulation S ISIN: XS1267081575, Common Code: 126708157; Rule 144A ISIN: US988895AF56, Common Code: 126844646, CUSIP: 988895AF5) (the "2027 Notes"),

in each case issued by the Issuer (each, a "Series" and, together, the "Existing Notes").


Zambia is soliciting consents (the "Consent Solicitation") from the holders of the outstanding Existing Notes (the "Noteholders") to consider and, if thought fit, pass extraordinary resolutions (the "Extraordinary Resolutions") at meetings of the Noteholders to be held on 4 June 2024 (the "Meetings") to approve, inter alia, mandatorily exchanging the Existing Notes of that Series for New Notes (the "Proposal"). "


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"The notices convening the Meetings to be held at the offices of White & Case LLP at 5 Old Broad Street, London EC2N 1DW at which the Extraordinary Resolutions will be considered and, if thought fit, approved, have been published on the date hereof in accordance with the relevant terms and conditions of the Existing Notes."


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"Consent Fee


Subject to the Settlement Conditions being satisfied or to the extent capable of being waived (in the sole and absolute discretion of Zambia, acting reasonably) waived, the Issuer (or its nominee) will pay the Consent Fee in the amount of U.S.$15.00 per U.S.$1,000 in principal amount of Existing Notes on the Settlement Date (as defined in the Memorandum) to each Noteholder who has delivered a Voting Instruction voting in favour of the relevant Extraordinary Resolution(s) on or prior to 5:00 p.m. (New York City time) on 24 May 2024 (the "Early Consent Deadline") and has not validly withdrawn or revoked such Voting Instruction.


The Exchange


If all the Extraordinary Resolutions in respect of each Series of Existing Notes are duly passed and implemented in accordance with their terms, the entire outstanding principal amount of Existing Notes of U.S.$3,000,000,000 and Accrued Interest thereon will be mandatorily exchanged (the "Exchange") for New Notes in the following aggregate principal amounts:


(i)         2022 Notes: The aggregate outstanding principal amount of the 2022 Notes in the amount of U.S.$750,000,000 and Accrued Interest on the 2022 Notes in the amount of U.S.$142,325,521 will be exchanged for:

a.   U.S.$389,924,112 in an aggregate principal amount of New A Notes; and

b.   U.S.$309,645,618 in an aggregate principal amount of New B Notes.


(ii)        2024 Notes: The aggregate outstanding principal amount of the 2024 Notes in the amount of U.S.$1,000,000,000 and Accrued Interest on the 2024 Notes in the amount of U.S.$336,930,556 will be exchanged for:

a.   U.S.$584,205,480 in an aggregate principal amount of New A Notes; and

b.   U.S.$463,927,881 in an aggregate principal amount of New B Notes.


(iii)       2027 Notes: The aggregate outstanding principal amount of the 2027 Notes in the amount of U.S.$1,250,000,000 and Accrued Interest on the 2027 Notes in the amount of U.S.$411,125,000 will be exchanged for:

a.   U.S.$725,870,408 in an aggregate principal amount of New A Notes; and

b.   U.S.$576,426,501 in an aggregate principal amount of New B Notes,


together, the "Consideration".  The Consideration will be delivered to the Clearing Systems on the Settlement Date. The draft terms and conditions of the New A Notes and the New B Notes are set out in the Memorandum.

A summary of the Existing Notes, indicative principal amounts of New Notes that Eligible Holders may receive pursuant to the Proposal and the Exchange and any Consent Fee that Noteholders that submit and do not revoke valid Voting Instructions at or prior to the Early Consent Deadline may receive is set out below."



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Zambia’s Agreement with Eurobond Holders Points to Path Out of Default - "The formal launch of the debt exchange is planned for the third week of November."


03 NOVEMBER 2023


The below article snippet originally appeared as a post on the Fitch Wire credit market commentary page. The full original article can be accessed at Fitch Ratings All opinions expressed are those of Fitch Ratings.


Fitch Ratings-Hong Kong-03 November 2023: The announcement of an agreement between the Zambian government and representatives of the country’s Eurobond holders is a positive development that could help Zambia to move out of default, says Fitch Ratings. Nevertheless, there are still potential hurdles that could impede a successful debt exchange.

Once Zambia has reached an agreement with creditors on restructuring its Eurobonds and we assess that it has completed that restructuring process, we would move its Long-Term Foreign-Currency Issuer Default Rating (LTFC IDR) out of ‘Restricted Default’ (RD) and assign a rating based on a forward-looking assessment of the sovereign's willingness and capacity to honour its foreign-currency debt obligations. We affirmed Zambia’s Long-Term Local-Currency IDR at ‘CCC’ in December 2022.


The agreement between the steering committee of the ad hoc creditor committee of Eurobond holders for the three Eurobonds maturing in 2022, 2024 and 2027 brings this restructuring a step closer.


The proposed debt exchange entails an 18% haircut to bondholders’ current notional claims of just over USD3.8 billion. As with the June agreement with the Official Creditor Committee (OCC), the deal includes a contingency element offering benefits to creditors. The remaining claims are restructured into two bonds, one of which has a step-up in payments and an earlier maturity under an upside case. The IMF confirmed in July that implementing the OCC agreement and a comparable agreement with private creditors would enable Zambia’s debt to be assessed as sustainable, with a moderate risk of debt distress over the medium term, under both the baseline and upside scenarios."


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"Progress towards a debt exchange could still be interrupted if the deal reached with the steering committee fails to secure sufficient support among wider Eurobond holders. According to authorities, members of the steering committee currently own or control approximately 18% of the outstanding bonds, and the broader ad hoc committee more than 40%. However, the Eurobonds maturing in 2022 and 2024 do not contain collective action clauses that ease an orderly debt restructuring by reducing the influence of holdout creditors. The formal launch of the debt exchange is planned for the third week of November."


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