The Ministry of Finance has announced an agreement in principle with creditors to restructure its $1 billion 2024 Eurobond, introducing a New Money Warrant to resolve prior negotiation issues.
The Ministry of Finance announced it reached an agreement in principle with an ad hoc committee representing institutional investors holding about 45 percent of the bond. This follows the collapse of talks on May 27 and a June 1 statement by the committee about potential UK court lawsuits after the Official Creditor Committee rejected a January deal.
The new structure includes a New Money Warrant allowing holders to subscribe to a future Eurobond of up to $1 billion on a 1-for-1 basis. The warrant can be exercised in a one-year window starting July 1, 2028, with Ethiopia able to redeem it for up to $90 million.
The primary New Bond features a 12 percent principal haircut to $880 million, a 6.15 percent interest rate, and maturity on July 15, 2029. Past due interest of $99.375 million will be paid in full at settlement along with a 0.5 percent consent fee. The International Monetary Fund confirmed the terms align with debt sustainability targets, and Official Creditor Committee co-chairs gave preliminary non-objection.
