Investing.com -- Zambia launched a cash tender offer to buy back its $1.36 billion bond due in 2053, joining other African nations in repurchasing outstanding debt to reduce servicing costs.
The southern African nation will finance the purchase using a $600 million loan from the African Development Bank and its own resources, according to a government statement.
The government is offering holders $780 for every $1,000 of principal tendered by June 5 and $740 per $1,000 to later participants.
The bond rose 5.6 cents to 79.34 cents on the dollar as of 2:46 p.m. in London on Friday, marking its largest gain in a year. It was the best-performing emerging-market sovereign dollar bond on Friday.
The offer comes before a potential increase in payments on the bonds. Under Zambia’s 2024 debt restructuring terms, coupons on the bond could increase to 7.5% from 0.5% if the country meets an International Monetary Fund debt-sustainability metric known as the composite indicator score for two consecutive semiannual periods.
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