On Wednesday, Fitch Ratings downgraded a key rating for Zambia from CC to Restricted Default. As such, eurobond investors had sought greater clarity from the government over Zambia’s Chinese debt obligations, concerned that further debt financing will be used to pay off China before themselves. Besseling also noted that Zambia had made a repayment on a World Bank loan two days before defaulting on the eurobond, indicating where the government’s priorities lie. He suggested that Chinese commercial and international bonds would likely fall to the bottom of the pecking order and experience a series of defaults from Zambia. Besseling projected a “gradual, managed lead up” to the elections, with the government prioritizing paying back development financing loans.

Source: The Standard November 23, 2020 15:33 UTC