Ethiopia Reaches Preliminary Deal to Restructure $1 Billion Defaulted Bond
Ethiopia has reached a preliminary deal with bondholders to restructure the defaulted $1 billion international bond.
The Ministry of Finance on Monday announced the deal detailing proposed terms that Ethiopia will issue an $880 million restructured bond to be repaid in installments, with the final maturity set for July 2029 and an interest rate of 6.15%.
Ethiopia will also fully settle three missed coupon payments totaling $99.375 million, with a consent fee for participating creditors.
Under this new agreement, it allows bondholders to purchase Ethiopian bonds of up to $1 billion at a market-linked interest rate in the future.
The Ministry of Finance said the IMF has approved the “New Money Warrant” structure.
Ethiopia’s Official Creditor Committee co-chairs, representing bilateral lenders like China and France, have expressed no objection to the deal.
In early 2026, restructuring attempts failed amid disagreements with official creditors.
It’s to be remembered that Ethiopia defaulted in December 2023 after missing a $33 million coupon payment.
After Ethiopia’s Ministry of Finance announcement of the preliminary restructuring deal, Ethiopia’s bonds rose by 2 cents, trading at 107.625 cents on the dollar, its highest level since January of 2026.
