Ethiopia nears restructuring deal with bondholders

This deal, the second such agreement this year, follows the rejection of an earlier proposal in January. The terms, finalized after a month of negotiations, include a detachable warrant instrument, granting investors subscription rights for a new international bond that can be traded independently of the existing 2014 bond. The International Monetary Fund and the co-chairs of Ethiopia’s Official Creditors Committee, China and France, have approved the terms.

However, the agreement still requires approval from the remaining members of the Official Creditors Committee. This development offers relief to Ethiopian officials, as the previous agreement was rejected for violating the Comparability of Treatment principle under the G20 Common Framework, where Ethiopia has sought debt treatment for over five years.