(Bloomberg) - Sri Lankan dollar bonds fell as investors weighed the implications of Zambia’s debt restructuring plan on the crisis-hit island nation’s own negotiations with creditors as China is an important lender to both countries.

The 7.55% 2030 dollar bond was indicated 1.3 cents lower at 29.5 cents on the dollar, set for the biggest drop in nearly two months. Zambia’s 8.5% 2024 bond was indicated down 3.6 cents to 55.5 cents on the dollar after the International Monetary Fund said the nation is seeking relief on nearly half its external debt.

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“The news from Zambia on haircut and the China link,” may be weighing on Sri Lankan bonds, said Lars Jakob Krabbe, a money manager for frontier-market fixed income at Coeli Frontier Markets AB. “Some consider it a proxy for how China will interact in the IMF common framework.”