Ethiopia and Bondholders Fail to Reach Deal on Defaulted Debt

Talks between Ethiopia’s government and holders of a $1 billion defaulted bond collapsed after both sides agreed to terminate the discussions without an agreement.

The Ethiopia Ad Hoc Bondholder Committee, which collectively holds more than 40% of the 2024 notes, offered an agreement that included a “material upfront haircut” to the amount owed on the debt, it said in a statement on Tuesday, without providing details on the proposed discount. In return, the group sought a mechanism to boost payouts in the event that Ethiopia’s export earnings improve in the coming years.