Ethiopia ad hoc bondholder committee confirms it has reached an agreement-in-principle with Ethiopia on financial terms of restructuring of 2024 notes

On January 3, 2026, Ethiopia announced that it had reached an agreement-in-principle (AIP) with an ad hoc committee of holders of its $1 billion 6.625% Notes due 2024 on financial terms of a restructuring deal. The agreement was welcomed by the market, with the sovereign bond experiencing a positive response. However, the Ministry of Finance later determined that the AIP did not fully align with the Comparability of Treatment principle, as assessed by the Official Creditor Committee (OCC). This principle is a key component of the debt restructuring framework established in the Memorandum of Understanding signed with the OCC in July 2025. As a result, Ethiopia could not proceed with the initial restructuring terms without risking inconsistency with its official sector debt framework and macroeconomic stability. Following this assessment, Ethiopia re-engaged with the ad hoc committee to negotiate revised terms. On May 28, 2026, the government confirmed that the ad hoc committee had rejected a revised restructuring proposal, leading to the termination of formal negotiations. The ongoing challenges highlight the complexity of Ethiopia’s broader debt restructuring efforts, which have been shaped by economic pressures, official creditor coordination, and evolving IMF program requirements.