Zambia: Upgrade to Buy as DSA gives positive signal for bonds
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IMF granted Board approval for Zambia's US$1.3bn ECF and published the DSA that will serve as basis for restructuring
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Calls for 35-45% NPV cut on external debt and US$8.4bn of cashflow relief from 2022-25, roughly = to maturities over ECF
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Implies recovery value in low 60s to mid-70s, with upside if bondholders can negotiate better terms; upgrade to Buy
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This report is independent investment research as contemplated by COBS 12.2 of the FCA Handbook and is a research recommendation under COBS 12.4 of the FCA Handbook. Where it is not technically a research recommendation because the subject of the research is not listed on any European exchange, it has nevertheless been treated as a research recommendation to ensure consistent treatment of all Tellimer's research. This report has been produced by the analyst(s) named above (the "Analyst").
The Analyst certifies that the views and forecasts expressed in this report accurately reflect their personal views about the subject, securities, or issuers specified herein. In addition, the Analyst certifies that no part of their compensation was, is, or will be directly or indirectly related to the specific recommendations or views expressed in this report.