Official creditors clear Ethiopia’s revised Eurobond restructuring terms
Ethiopia’s official creditor committee has found the country’s revised agreement with private bondholders consistent with the G20 Common Framework, clearing a major obstacle to restructuring its $1 billion Eurobond.
In short
- Ethiopia’s official creditor committee has found the country’s revised agreement with private bondholders consistent with the G20 Common Framework, clearing a major obstacle to restructuring its $1 billion Eurobond.
Ethiopia has moved closer to completing the restructuring of its $1 billion Eurobond after the co-chairs of its Official Creditor Committee confirmed that revised terms agreed with private bondholders meet the G20 Common Framework’s comparability-of-treatment requirement.
The Ministry of Finance announced the committee’s assessment on Friday, August 21, 2026. The committee is co-chaired by France and China. Its decision removes an obstacle that had emerged when official creditors rejected an earlier proposal on the grounds that private bondholders were not taking a comparable share of the restructuring burden.
Ethiopia issued the bond in 2014 and defaulted in December 2023 after missing an interest payment of about $33 million. Negotiations with an ad hoc bondholder committee subsequently produced revised terms, including a 15 percent reduction in principal, a replacement bond due in July 2029 with a 6.125 percent coupon, and payment of nearly $100 million in overdue interest.
The latest structure also includes a “New Money Warrant” that would give participating bondholders an option to subscribe to a future Ethiopian bond on pre-agreed terms. Official creditors retained the right to seek corresponding adjustments if the warrant gives private creditors excessive benefits, and described the arrangement as a one-off exception rather than a precedent for other Common Framework cases.
Implementation is not yet complete. The Finance Ministry said the exchange will proceed after Ethiopia and the bondholder committee finalize the remaining non-financial terms and legal documentation. The committee’s clearance nevertheless marks a significant step in Ethiopia’s effort to restore debt sustainability and continue its IMF-supported economic programme.
