Zambia Debt Deal Spurs Rally in Distressed Emerging Markets

  • Bonds of Sri Lanka, Pakistan, Ghana follow Zambia higher
  • Agreement provides precedent for other distressed nations
The city centre in Lusaka, Zambia.Photographer: Zinyange Auntony/Bloomberg
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Bonds of developing nations in debt distress gained on Friday in a broad relief rally sparked by Zambia’s precedent-setting deal with bilateral creditors.

The southern African country reached an agreement in principle to restructure $6.3 billion of debt, potentially unlocking funding from the International Monetary Fund and setting the stage for a renegotiation of its Eurobonds as well.