Zambia: Upgrade to Buy as DSA gives positive signal for bonds

  • IMF granted Board approval for Zambia's US$1.3bn ECF and published the DSA that will serve as basis for restructuring

  • Calls for 35-45% NPV cut on external debt and US$8.4bn of cashflow relief from 2022-25, roughly = to maturities over ECF

  • Implies recovery value in low 60s to mid-70s, with upside if bondholders can negotiate better terms; upgrade to Buy
September 9th, 2022
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