CTPD Commends Government Over 97.85% Eurobond Buyback Participation

The Centre for Trade Policy and Development (CTPD) has welcomed the government’s successful execution of a Eurobond buyback exercise, which achieved a participation rate of 97.85%.

Despite the strong outcome, CTPD noted that a comprehensive net present value assessment is still required to determine whether the transaction will ultimately generate net savings for the country.

On Wednesday, the Ministry of Finance and National Planning announced the launch of a tender offer to repurchase part of Zambia’s US$1.36 billion Eurobond maturing in 2053. The operation is being financed through a US$600 million loan from the African Development Bank (AfDB), complemented by a US$65 million incentive package designed to encourage bondholder participation.

According to the Ministry, “the transaction is part of Zambia’s broader debt management and restructuring strategy aimed at strengthening debt sustainability and reducing long-term financial obligations.”

CTPD Public Finance Researcher Robinson Nakambo said the high participation rate demonstrated strong acceptance of the offer and reflected investor confidence in the structure of the transaction. He explained that the buyback could prove to be a prudent policy intervention if the combined cost of the repurchased bonds and the AfDB financing when evaluated in present-value terms is lower than the future debt-service payments that would otherwise have been due.

The successful outcome of the exercise also adds to growing signs of progress in Zambia’s economic recovery efforts and strengthening investor confidence.