Zambia's Ministry of Finance announced on Tuesday that over 90% of the holders of its $3 billion in outstanding international bonds have agreed to its restructuring plan, clearing a significant hurdle for the country to exit a prolonged default.

Voting on the proposal officially comes to an end on 30th May, Reuters news agency reports.

Yet, in regard to the instructions received by the government on 24th May, “Zambia expects that the meetings will be quorate and that each of the extraordinary resolutions in respect of each series of existing notes will be approved at the relevant meeting,” said a regulatory statement by the ministry.

Zambia defaulted over three years ago and is currently restructuring its debt under the Common Framework. This G20 platform unites major creditors such as China and the traditional group of developed creditor nations, known as the Paris Club, to facilitate prompt and efficient debt overhauls for low-income countries.

Zambia was widely regarded as a test case for the Common Framework. However, the process has been plagued by significant delays, hindering essential investments, stalling economic growth, and negatively impacting local financial markets. The situation was further exacerbated by a devastating drought. 

Under the proposed plan, bondholders will exchange three existing instruments set to mature in 2022, 2024, and 2027 for two amortizing bonds. One of these new bonds will feature higher repayments contingent on improvements in the country's economic outlook.

In 2022, Zambia secured a $1.3 billion loan from the International Monetary Fund, which required the country to restructure its debt with other creditors.

According to Tradeweb data, Zambia’s international bonds remained unchanged in trading, with the 2024 bond indicated at 63.4 cents on the Dollar and the 2027 maturity at 75.9 cents.