Key Takeaways:
• US$880 million replacement bond proposed under Ethiopia’s revised Eurobond restructuring plan.
• Ministry of Finance ended negotiations with Eurobond holders on 27 May 2026 without agreement.
• 12% principal haircut proposed through issuance of new bonds maturing in July 2029.
• Official Creditor Committee rejected earlier Value Recovery Instrument structure.
• 4.25% coupon rate proposed under revised restructuring terms.
• US$99.375 million past-due interest settlement included in government offer.
• Continued default leaves Ethiopia seeking alternative debt restructuring solutions.
Why It Matters:
The collapse of negotiations prolongs uncertainty around Ethiopia’s sovereign debt restructuring process and external financing outlook. Without an agreement, the country remains exposed to higher borrowing costs and reduced market access. The outcome also highlights ongoing challenges in aligning private creditor expectations with official creditor restructuring requirements.
Key Numbers:
US$880 million — Proposed replacement bond value
12% — Principal haircut proposed by Ethiopia
4.25% — Proposed bond coupon rate
US$99.375 million — Past-due interest settlement amount
27 May 2026 — Date negotiations ended