(Adds analyst comment)
By Rachel Savage
LONDON, Aug 1 (Reuters) - Zambia's sovereign dollar-denominated Eurobonds gained more than 1 cent in the dollar on Monday, after a pledge on Saturday by bilateral creditors to negotiate debt relief cleared the way for a $1.4 billion deal with the IMF.
Its 2024 maturity was up 1.417 cents at 8.46 GMT, according to Tradeweb data, while the 2027 issue was up 1.242 cents. Bonds were bid between 58.5 cent and 59.2 cents - still trading at distressed levels - but at their strongest in a month.
There was no trading data available for the issue that matures in September 2022.
In 2020, Zambia became the first African country to default in the pandemic era, with its external debts reaching more than $17 billion at the end of 2021, according to government data, and the restructuring is seen by many analysts as a test case.
International Monetary Fund (IMF) managing director Kristalina Georgieva said on Saturday that she was "very pleased" Zambia's bilateral creditors had made the commitments necessary to unlock a $1.4 billion three-year program first agreed in December.
The Fund's executive board is likely to sign off on the money in September, sources have previously told Reuters.
Zambia's bilateral creditor committee, co-chaired by China and France, still has to agree the details of the debt relief, which then needs to be followed by private lenders offering comparable terms.
Eurobondholders, some of whom have criticised their not being included in the initial phase of restructuring negotiations, held $3 billion of debt plus $336 million of interest arrears at the end of 2021.
Zambia owes nearly $6 billion to Chinese entities, of which it classifies about a third as commercial debt, owed to Chinese state-owned companies and banks.
The copper-rich Southern African country now needs to shift focus to growing its economy to avoid another debt crisis in future, said Trevor Simumba, a Zambian economic policy researcher.
"For two, three years, we've just been talking about debt," he said. "But thankfully I think we are coming to the end of this problem." (Reporting by Rachel Savage, editing by Karin Strohecker and Hugh Lawson)