Monday 5th January 2026
By inAfrika Newsroom
Ethiopia Eurobond restructuring deal 2026 moved forward after the government reached a draft agreement with a bondholder group on key financial terms for its defaulted international bond. The deal covers Ethiopia’s $1 billion Eurobond that matured in 2024.
Officials said the draft outlines the main financial elements of a replacement bond. However, non-financial conditions still need to be settled with the ad hoc committee, which represents more than 45% of the bond.
Ethiopia defaulted on a coupon payment in late 2023. Since then, it has pursued debt relief under the G20 Common Framework. That process also requires “comparability of treatment” across different creditor classes.
The government said it shared the draft deal with the IMF and the Official Creditor Committee for review and non-objection. The IMF also welcomed the draft as a step toward debt sustainability.
The talks follow earlier progress with bilateral lenders. Ethiopia struck a restructuring deal with official creditors in mid-2023 that delivered more than $3.5 billion in cashflow relief. That deal also helped reopen the path to negotiate with bondholders.
Still, markets will watch the details closely. Investors want clarity on how much principal and interest change, and how the new instrument ranks in Ethiopia’s wider debt plan. They also want to see how the country’s reforms and IMF programme stay on track in 2026.
Ethiopia must now close out the remaining conditions with the bondholder committee. After that, it will seek formal non-objection from the IMF and official creditors.
Moreover, lawyers and advisers will draft final documentation and launch a bondholder vote. If support clears the required thresholds, Ethiopia aims to implement the restructuring in early 2026.
Ethiopia’s debt path affects regional finance sentiment. When a large economy makes credible progress, it can ease pressure on other frontier issuers.
Also, a smoother restructuring can reduce uncertainty for trade and investment. In contrast, delays can keep borrowing costs high and constrain public spending on energy, transport and social services.
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