Morgan Stanley expects Zambia to lift its eurobond buyback price in an effort to break a standoff with a group of bondholders that rejected the figure offered last week. The bank signals the Lusaka government will table a higher proposal to win the needed support.

The impasse stems from creditors arguing the initial price undervalues Zambia’s fiscal risk and the lingering shadow of previous defaults. By raising the offer, officials aim to attract sufficient participation to meet the buyback’s volume target, a step that would free cash and improve debt‑service ratios ahead of the next budgeting cycle.

Market watchers see the revision as a litmus test for Zambia’s willingness to restructure debt on market terms rather than rely on formal IMF programmes. A successful buyback could lower borrowing costs, restore foreign investor confidence, and signal that the country can manage its external obligations without emergency assistance.

Investors will gauge the size of the revised price and the speed of the tender. If the government secures enough takers, the eurobond market could see a modest rally, easing Zambia’s financing pressures. Conversely, another deadlock may push the bond deeper into distress, tightening credit lines and raising spreads on its remaining debt.