Zambia’s $1.36 billion 2053 bond holders reject the government’s tender offer, arguing the process bypassed negotiations and threatens investors. The ad hoc group’s lawyers labeled the terms materially adverse and warned that a 75 percent tender could trigger a clean‑up call, forcing Zambia to redeem all remaining notes for future returns later.

The offer, launched last month, would have allowed Zambia to buy back up to 75 percent of the debt at a price near par, sparking fears that the clean‑up clause could cut off future coupon step‑ups. Creditors fear losing the planned 2.5 % coupon increase in 2027 for bondholders and market confidence.

If the government proceeds, the clean‑up call could trigger a full redemption, wiping out remaining bonds and stalling Zambia’s debt restructuring. Investors will watch closely as the dispute may set a precedent for sovereign bond buybacks worldwide in 2026 markets.

The creditors’ stance underscores the risk of unilateral government actions in sovereign debt markets. Zambia must negotiate terms that protect both parties to avoid a costly default and preserve investor confidence and maintain access to future capital flows for public infrastructure projects.