Ethiopia's debt restructuring efforts face hurdles with bondholders and commercial creditors

Ethiopia's official creditors committee OCC reports that the country has not yet finalized restructuring agreements with bondholders and commercial creditors that meet its comparability of treatment CoT requirements. The committee, co-chaired by China and France, rejected an agreement in principle reached in January between the Ethiopian government and holders of its one billion dollar Eurobond, citing concerns about fairness to other creditors. This rejected agreement included a 15 percent haircut, a new USD 850 million bond maturing in 2029, and a USD 350 million principal repayment due in July 2026. While negotiations with bondholders are ongoing, an agreement in principle has been reached with one large commercial creditor that is assessed as meeting CoT. The report, presented at the IMF-World Bank Spring Meetings, notes that Ethiopia, Ghana, and Zambia are pursuing debt treatment under the G-20 Common Framework. Ethiopia's credit rating remains in default after the government failed to service a USD 33 million coupon in December 2023. Finance Minister Ahmed Shide attended the Spring Meetings, providing updates on Ethiopia’s debt restructuring and calling for continued engagement from creditors and support from international financial institutions.