More than two years after seeking debt relief and over a year after defaulting on its only Eurobond, Ethiopia has reached an agreement in principle with a group of private creditors on the core financial terms of a restructuring, reviving negotiations that collapsed late last year.<\/p>\n
The Ministry of Finance said the agreement was reached following restricted discussions held between December 23 and January 1 with an ad hoc committee of institutional investors holding more than 45 percent of Ethiopia\u2019s one billion US dollars 6.625 percent notes due in 2024.<\/p>\n
According to the ministry, the talks resulted in an agreement in principle on the main financial terms of restructuring the bond, which represents Ethiopia\u2019s sole exposure to international capital markets.<\/p>\n
\u201cThe discussions yielded an agreement in principle between Ethiopia and the ad hoc committee on the principal financial terms of a restructuring of the 2024 notes,\u201d the Ministry of Finance said.<\/p>\n
Ethiopia defaulted on the bond in December 2023 after missing a 33 million US dollars coupon payment, becoming the first African country to default on an international bond since Ghana. The bond was issued in 2014 and matured in December 2024.<\/p>\n
Negotiations with private creditors had broken down in October after disagreements over the scale of debt relief and how losses should be shared between bondholders and official creditors under the G20 Common Framework.<\/p>\n
The Ministry of Finance said the agreement in principle is consistent with the parameters of Ethiopia\u2019s International Monetary Fund programme and with the comparability of treatment principle applied by the official creditor committee, which is co-chaired by China and France.<\/p>\n
The agreed financial terms have been communicated to the official creditor committee for non-objection and to the IMF to confirm consistency with Ethiopia\u2019s long-term debt sustainability, according to the ministry.<\/p>\n
Ethiopia is implementing a 3.4 billion US dollars IMF Extended Credit Facility approved in July 2024, which requires significant debt relief to restore sustainability. The IMF has assessed Ethiopia\u2019s debt problems as solvency-related rather than temporary liquidity pressures.<\/p>\n
The ministry said the agreement remains subject to finalising non-financial terms, including documentation and covenants, as well as receiving confirmations from the IMF and official creditors.<\/p>\n
\u201cIn parallel, Ethiopia has committed to work collaboratively and in good faith with the ad hoc committee and its advisers to reach agreement on non-financial terms of the new instruments,\u201d the ministry said.<\/p>\n
Ethiopia aims to implement the restructuring through an exchange offer or consent solicitation as early as possible in 2026, the statement added.<\/p>\n
The ad hoc committee was advised by Weil, Gotshal & Manges and Ankura Sovereign Advisors, while Ethiopia was advised by White & Case and Lazard.<\/p>\n
Progress with private creditors has lagged behind negotiations with bilateral lenders. Ethiopia applied for debt treatment under the Common Framework in 2021, with official creditors reaching an agreement in principle in March 2025, followed by a memorandum of understanding in July.<\/p>\n
Ratings agencies continue to classify Ethiopia as distressed due to the prolonged default, though completion of the restructuring could pave the way for upgrades and a gradual return to international capital markets.<\/p>\n","protected":false},"excerpt":{"rendered":"More than two years after seeking debt relief and over a year after defaulting on its only Eurobond,…\n","protected":false},"author":2,"featured_media":385227,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[36],"tags":[28,101],"class_list":{"0":"post-385226","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-business","9":"tag-economy"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/385226","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/comments?post=385226"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/385226\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media\/385227"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media?parent=385226"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/categories?post=385226"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/tags?post=385226"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}