{"id":31390,"date":"2022-09-16T21:15:19","date_gmt":"2022-09-16T21:15:19","guid":{"rendered":"https:\/\/www.africa-press.net\/zambia\/all-news\/zambia-bond-restructuring-losses-to-be-more-than-expected-super-bond-possible-morgan-stanley"},"modified":"2022-09-16T21:30:24","modified_gmt":"2022-09-16T21:30:24","slug":"zambia-bond-restructuring-losses-to-be-more-than-expected-super-bond-possible-morgan-stanley","status":"publish","type":"post","link":"https:\/\/www.africa-press.net\/zambia\/all-news\/zambia-bond-restructuring-losses-to-be-more-than-expected-super-bond-possible-morgan-stanley","title":{"rendered":"Zambia bond restructuring losses to be more than expected, \u2018super bond\u2019 possible \u2013 Morgan Stanley"},"content":{"rendered":"

Africa-Press – Zambia. <\/strong><\/span>Reuters reports that Investor losses after the restructuring of Zambia\u2019s three defaulted Eurobonds are likely to be greater than expected, Morgan Stanley said on Tuesday, adding that a new combined \u2018super bond\u2019 maturing in 2029 was a possibility.<\/p>\n

A \u201crealistic scenario\u201d would be for the $3 billion of bonds to undergo a 35% principal haircut, a 30% cut to interest payments and 50% of accrued payments being written off.<\/p>\n

That would mean a recovery value of $56.50, an exit yield of 12% and a cut in the debt\u2019s net present value \u2013 the value of future payments \u2013 of 51%, bank analysts said in a note.<\/p>\n

Zambia became the first African sovereign default in the pandemic era in 2020, with debt that the International Monetary Fund (IMF) said reached 133% of GDP at the end of last year.<\/p>\n

The IMF said last week that Zambia will need $8.4 billion of debt relief from 2022 until 2025, in a report known as a Debt Sustainability Analysis (DSA) that forms the basis of negotiations to restructure the country\u2019s more than $17 billion in external debt.<\/p>\n

\u201cThe two key unknown questions that will form part of restructuring talks are: 1) whether an upfront principal haircut is required,\u201d the Morgan Stanley note said.<\/p>\n

\u201cAnd 2) How many payments can be made immediately after the programme ends\u2026 from 2026 onwards.\u201d The IMF\u2019s figures suggest external debt \u201crelief\u201d needs to be 35-45%, Morgan Stanley said.<\/p>\n

World Bank president David Malpass said in a statement last week, \u201ca deep debt reduction of 45% in net present value (NPV) terms\u2026 is essential\u201d. Bondholders have previously expressed dissatisfaction with being left out of early restructuring negotiations, including over assumptions in the DSA.<\/p>\n

A \u2018super bond\u2019, where old bonds are combined into one new one, is also possible, Morgan Stanley said, setting out a $52 recovery value from a hypothetical seven-year maturity, with a 20% principal haircut, a 50% reduction in missed payments and a 5% coupon from 2026. Currently, Zambia\u2019s 2022, 2024 and 2027 bonds are trading at 56.04, 58 and 57.5 cents in the dollar respectively, according to MarketAxess data.<\/p>\n

For More News And Analysis About Zambia<\/a> Follow Africa-Press<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Africa-Press – Zambia. Reuters reports that Investor losses after the restructuring of Zambia\u2019s three defaulted Eurobonds are likely to be greater than expected, Morgan Stanley said on Tuesday, adding that a new combined \u2018super bond\u2019 maturing in 2029 was a possibility. A \u201crealistic scenario\u201d would be for the $3 billion of bonds to undergo a […]<\/p>\n","protected":false},"author":84,"featured_media":31389,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2,5],"tags":[234,235,233],"class_list":["post-31390","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-all-news","category-economy","tag-africa-press","tag-africa-press-zambia","tag-zambia"],"yoast_head":"\nZambia bond restructuring losses to be more than expected, \u2018super bond\u2019 possible \u2013 Morgan Stanley - Zambia<\/title>\n<meta name=\"description\" content=\"Reuters reports that Investor losses after the restructuring of Zambia\u2019s three defaulted Eurobonds are likely to be grea ...\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.africa-press.net\/zambia\/all-news\/zambia-bond-restructuring-losses-to-be-more-than-expected-super-bond-possible-morgan-stanley\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Zambia bond restructuring losses to be more than expected, \u2018super bond\u2019 possible \u2013 Morgan Stanley\" \/>\n<meta property=\"og:description\" content=\"Reuters reports that Investor losses after the restructuring of Zambia\u2019s three defaulted Eurobonds are likely to be grea ...\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.africa-press.net\/zambia\/all-news\/zambia-bond-restructuring-losses-to-be-more-than-expected-super-bond-possible-morgan-stanley\" \/>\n<meta property=\"og:site_name\" content=\"Zambia\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/AfricaPressTunisiaa\" \/>\n<meta property=\"article:published_time\" content=\"2022-09-16T21:15:19+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2022-09-16T21:30:24+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/static.africa-press.net\/zambia\/sites\/35\/2022\/09\/postQueueImg_14-6324ead9edffa.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"800\" \/>\n\t<meta property=\"og:image:height\" content=\"404\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"cfeditoren\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"cfeditoren\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"2 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/www.africa-press.net\/zambia\/all-news\/zambia-bond-restructuring-losses-to-be-more-than-expected-super-bond-possible-morgan-stanley#article\",\"isPartOf\":{\"@id\":\"https:\/\/www.africa-press.net\/zambia\/all-news\/zambia-bond-restructuring-losses-to-be-more-than-expected-super-bond-possible-morgan-stanley\"},\"author\":{\"name\":\"cfeditoren\",\"@id\":\"https:\/\/www.africa-press.net\/zambia\/#\/schema\/person\/068c7ab4e9634ae78ec5d54ec46598bb\"},\"headline\":\"Zambia bond restructuring losses to be more than expected, \u2018super bond\u2019 possible \u2013 Morgan Stanley\",\"datePublished\":\"2022-09-16T21:15:19+00:00\",\"dateModified\":\"2022-09-16T21:30:24+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/www.africa-press.net\/zambia\/all-news\/zambia-bond-restructuring-losses-to-be-more-than-expected-super-bond-possible-morgan-stanley\"},\"wordCount\":352,\"commentCount\":0,\"image\":{\"@id\":\"https:\/\/www.africa-press.net\/zambia\/all-news\/zambia-bond-restructuring-losses-to-be-more-than-expected-super-bond-possible-morgan-stanley#primaryimage\"},\"thumbnailUrl\":\"https:\/\/static.africa-press.net\/zambia\/sites\/35\/2022\/09\/postQueueImg_14-6324ead9edffa.jpg\",\"keywords\":[\"Africa Press\",\"Africa Press-Zambia\",\"Zambia\"],\"articleSection\":[\"all news\",\"economy\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/www.africa-press.net\/zambia\/all-news\/zambia-bond-restructuring-losses-to-be-more-than-expected-super-bond-possible-morgan-stanley#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.africa-press.net\/zambia\/all-news\/zambia-bond-restructuring-losses-to-be-more-than-expected-super-bond-possible-morgan-stanley\",\"url\":\"https:\/\/www.africa-press.net\/zambia\/all-news\/zambia-bond-restructuring-losses-to-be-more-than-expected-super-bond-possible-morgan-stanley\",\"name\":\"Zambia bond restructuring losses to be more than expected, \u2018super bond\u2019 possible \u2013 Morgan Stanley - 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