Zambia just pulled off something that would have sounded absurd three years ago: buying back the entirety of a $1.36 billion Eurobond. The country that defaulted on its debt in 2020 has now secured enough bondholder participation to retire the notes entirely, clearing the 75% threshold that triggers a clean-up call provision on the remaining holdouts.
How Zambia funded the buyback
Here’s the thing about buying back $1.36 billion in bonds: you need cash. Zambia cobbled together the financing from two sources. The African Development Bank provided a $600 million loan, with the rest coming from Zambia’s own domestic resources.
The 2053 bond itself has an unusual origin story. It was created just last year, in June 2024, as part of Zambia’s Eurobond exchange under the G20 Common Framework. That exchange was the culmination of years of painful restructuring negotiations following the country’s 2020 default, which made Zambia the first African nation to default on its sovereign debt during the pandemic era.
The clean-up call mechanism
