The architecture for sovereign debt restructurings tends to be shaped by landmark cases. In that view, the deal reached in June by Zambia with its Official Creditor Committee is an important milestone. One aspect that ought to get more attention however is the story of Zambia’s domestic debt since the country’s external default in November 2020. Domestic debt has long been a missing piece in the international financial architecture, and Zambia has been a case in point. IMF support was withheld for almost two years absent financing assurances from official creditors, leading Zambia to rely heavily on its domestic debt market. This coincided with massive foreign inflows over the summer of 2021, supported by various factors (SDR allocation, election). The inclusion of these nonresident holdings in the IMF’s external DSA then created pressures from other creditors to try and sweep them into the restructuring perimeter. Fears of a potential domestic debt restructuring in turn led to cracks appearing in the local market, until official creditors stated publicly that they would leave domestic debt untouched as part of their restructuring deal. […]