Ethiopia Bondholders Reject Revised Restructuring Proposal

Ethiopia Bondholders Reject Revised Restructuring Proposal

Ethiopia's finance ministry announced on Thursday that holders of its $1 billion international bond due in 2024 rejected a revised restructuring proposal during formal talks held between May 6 and 27.

Details of the Talks

In January, Ethiopia said it had reached a preliminary restructuring deal on key financial terms with a group representing holders of its sole international bond. However, the Official Creditor Committee, co-chaired by France and China, stated that the deal under the G20 restructuring initiative did not meet the Comparability of Treatment principle, which requires a country to seek similar debt relief terms from all its creditors.

This led the government to revise its proposal, which was then approved by official creditors and presented to bondholders in the latest round of talks. The ministry said, 'The revised proposal was presented to the ad hoc committee for consideration during the restricted period. The ad hoc committee rejected the revised proposal, and the restricted period was subsequently terminated.'

Next Steps

The government added it will 'assess all its available options to resolve the current situation, including a potential exchange offer or other market transaction relating to the 2024 Notes.' Ethiopia's dollar-denominated bonds traded broadly unchanged, bidding at 104.75 cents on the dollar, according to Tradeweb data.