Turkish firm to refinance Zambia’s Sh75b Eurobond

Turkish President Tayyip Erdogan meets with Zambia’s President Edgar Lungu at the State House in Lusaka, Zambia July 28, 2018. [REUTERS]
A Turkish company has expressed interest in refinancing Zambia’s Sh75 billion ($750 million) Eurobond falling due in 2022, Zambian President Edgar Lungu said on Saturday during talks with Turkey’s President Tayyip Erdogan.

Zambia, whose credit rating was downgraded by Moody’s on Friday, said in December last year that it would begin refinancing Eurobonds worth a total Sh300 billion ($3 billion) in 2019 to reduce the cost of debt servicing for Africa’s number two copper producer.

During talks in Lusaka with the visiting Turkish president, broadcast on state ZNBC TV, Lungu said that the firm would send representatives to Zambia in September to discuss details of refinancing.

“We urge you to take keen interest in this matter and encourage the company to pursue this deal without hesitation,” Lungu told Erdogan during the meeting held at State House, but gave no details about the company he mentioned.

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As well as the Sh75 billion ($750 million) Eurobond, Zambia has a Sh100 billion ($1 billion) Eurobond due in 2024 and another (Sh125 billion)  $1.25 billion Eurobond which will be due for repayment in 2027.

Stable outlook

Ratings agency Moody’s on Friday downgraded Zambia’s long-term issuer ratings to Caa1 from B3 and maintained a stable outlook, reflecting ongoing fiscal consolidation challenges.

The International Monetary Fund in February rejected Zambia’s borrowing plans, saying they risked making it harder for the southern African country to sustain its debt load.

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