MINISTER ASSURES CREDITORS

The debt standstill aims at achieving five objectives; 1. provide immediate liquidity relief to free fiscal space. The Debt standstill requested (pursuant to the Consent Solicitation) and the debt service suspension from other public and private creditors will help government address financing needs arising from the COVID-19 pandemic.

2. Provide Zambia the necessary time and leeway to:

(i) Finalize the assessment of our public debt situation (ii) Calibrate key parameters of debt management exercise in coordination with the IMF. 3. Engage a constructive and good faith dialogue with creditors. Reach agreement in principle with our creditors on debt strategy parameters compatible with Zambia’s public debt sustainability as per IMF definition 4. Government is also seeking to formally implement agreements with creditors to reach agreement in principle with creditors on debt strategy parameters compatible with Zambia’s public debt sustainability as per IMF definition. 5. Secure external financing in the context of an appropriate IMF engagement Expected Timeline for the Debt Management Exercise :

October – December 2020

• Investor consultations

September 22nd, 2020:

• Launch of the Consent Solicitation and announcement about Call with Investors

September 29th, 2020

• Call with Investors

October 16th, 2020, 10:00 a.m.

• Expiration of Consent Solicitation

• Voting Deadlines

November 13th, 2020

• Expiration of Grace Period

Key Principles of the Creditor Engagement Strategy include the plans for government to intensify its engagement with its international creditors on the basis of the following principles:

Transparency, Good faith efforts for a collaborative process to restore debt sustainability, Fair treatment across creditors and Consistency with IMF debt sustainability analysis

According to the minister, bond holders want assurances which Government is ready to provide.

And Bloomberg reports that Bondholder committee members “unable to provide a positive response to the consent solicitation request at this time given the absence of clarity on a number of issues,” group says in emailed statement.

*“Committee members are ready to consider engaging with Zambia as part of a liability-management exercise, which may include the provision of near-term debt relief, but such an exercise should be designed in a way that provides a durable benefit to all stakeholders”

* Committee consists of 14 international financial institutions based in the U.S. and Europe and in aggregate holds approximately 40% of the total amount of Zambia’s outstanding Eurobonds.

* Committee in close contact with holders representing additional 30%.

* Committee appointed Newstate Partners as financial advisers.