A group of Zambian bondholders is scheduled to meet on Tuesday and is widely expected to vote against the government’s request for a six-month repayment holiday on $3 billion of Eurobonds. If that is in fact what happens, then it would likely prompt the government to default on that portion of its debt, making it the first African government to do so this year.
“In all likelihood the vote will fail,” said Anthony Simond, a portfolio manager at Aberdeen Standard Investments in London, which has a “small position” in Zambian Eurobonds. “The feeling is that the Zambians haven’t given bondholders sufficient evidence that it has a coherent fiscal plan that brings debt sustainability back on track.”
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