ETHIOPIA · SOVEREIGN DEBT
Key Facts
- —What is happening Ethiopia is the only one of six tracked sovereign debt cases with a bond exchange still pending as of Wednesday 14 October 2026, almost three years after it defaulted on its US$1 billion Eurobond.
- —Why it matters Until the exchange closes, Ethiopia’s dollar bond stays in default, and two of the three big rating agencies still showed Ethiopia in selective or restricted default as of March 2026.
- —The numbers The defaulted bond is worth US$1 billion, the June deal offers a new US$880 million bond with a 12% haircut at 6.15% to 15 July 2029, and 11 of 14 official lender agreements are signed.
- —Who is who The Global Sovereign Debt Roundtable is a forum co-chaired by the IMF, the World Bank and the G20 presidency, and a group of Ethiopia’s bondholders forms an Ad Hoc Committee that controls about 45% of the notes.
- —What to watch The next step is the exchange offer, which Ethiopia said on 29 June it would launch in the coming months once the non-financial terms are agreed with bondholders.
- —What it means for you Any US investor holding the defaulted Ethiopian dollar bond, directly or through an emerging market fund, still waits for new bonds, and nothing here is investment advice.
Ethiopia is the only one of six tracked sovereign debt cases with a bond exchange still pending, a global progress report shows. The report is dated Wednesday 14 October 2026.
Ethiopia is the only one of six tracked sovereign debt cases with a bond exchange still pending. The Global Sovereign Debt Roundtable (GSDR) says so in its seventh progress report, dated Wednesday 14 October 2026.
Ethiopia has been in default since December 2023 on its only Eurobond, a US$1 billion note. The roundtable is co-chaired by the IMF, the World Bank and the G20 presidency, whose April co-chair was a US official.
What the Ethiopia Bond Exchange Report Says
The report calls Ethiopia’s debt restructuring “well advanced”, but it lists the bond exchange as still pending. Eleven of 14 bilateral agreements with the Official Creditor Committee (OCC), the group of government lenders, have been finalised.
Ethiopia reached an agreement in principle with the Ad Hoc Committee of Eurobond holders on Monday 29 June 2026. On Friday 21 August the Ministry of Finance published the OCC’s finding that the agreed terms meet comparability of treatment.
Comparability of treatment is the rule that private bondholders must give relief comparable to what government lenders give. The report says that agreement and other deals cover about 75% of Ethiopia’s total external commercial debt.
Ethiopia completed the fifth review of its IMF-supported programme in July 2026, the report adds. Since fiscal year 2021 the World Bank has committed close to US$16 billion, over half of it on grant terms.
Ethiopian Business Review, The Reporter Magazine and Birr Metrics all summarised the report on Thursday 15 October. Their accounts match the report on the 11 of 14 agreements and on the pending bond exchange.
The table dates S&P’s selective default on Ethiopia to 15 December 2023 and Fitch’s restricted default to 27 December 2023. Moody’s rates Ethiopia Caa3, and all three ratings are shown as current on 19 March 2026.
How Ethiopia Compares With Its Five Peers
The report tracks six cases: Chad, Ethiopia, Ghana and Zambia under the G20 Common Framework, plus Sri Lanka and Suriname outside it. The Common Framework is the G20 process that puts China and Western government lenders at one table.
Suriname closed its bond exchange on 6 November 2023, and Zambia followed on 28 May 2024. Ghana closed on 3 October 2024, and Sri Lanka on 13 December 2024.
The table lists Chad’s bond exchange as not applicable, so Ethiopia is the only case there with one still open. The four that closed did so 16 to 24 months after their IMF programmes were approved, by the table’s own counts.
Ethiopia’s programme was approved on Monday 29 July 2024, which is more than 26 months before the report. By this article’s own count, that is already longer than any of the four finished cases took.
The table also shows the IMF moved fastest in Ethiopia’s case: 2.1 months from staff agreement to programme approval, by its count. Official creditors gave assurances on 11 July 2024, and the OCC reached its agreement in principle on 21 March 2025.
The Terms Agreed in June
The Ministry of Finance published the principal terms on Monday 29 June 2026 for its US$1 billion 6.625% notes due 2024. The Ad Hoc Committee of institutional holders controls about 45% of those notes, the ministry said.
Holders would receive a new US$880 million bond, a 12% haircut on the old notes. It pays 6.15% interest and matures on 15 July 2029.
Principal is due as US$180 million in 2026, US$100 million in 2027, and US$300 million in each of 2028 and 2029. The first date, 15 July 2026, has already passed with the exchange still open.
Holders would also get a 0.5% consent fee and full payment of US$99.375 million in interest on three missed coupons. Ethiopia would pay the committee a work fee of US$10 million, and the committee’s adviser costs come out of the settlement.
A separate New Money Warrant would let holders buy a future Ethiopian Eurobond of up to US$1 billion at par. That bond would run seven years and pay 450 basis points, or 4.5 percentage points, above six-year US Treasuries.
Ethiopia may instead redeem the warrant for a price capped at 9% of the amount redeemed, or US$90 million on US$1 billion. The strike window opens on 1 July 2028 and runs for one year.
The OCC said the new bond’s relief is consistent with comparability of treatment but “remains relatively low”. It added that using the warrant could change that view, and that the deal sets no precedent for later cases.
The OCC judged the January 2026 agreement in principle non-compliant, as it would likely have meant very low bondholder effort. The OCC letter of 31 July 2026 found the June terms compliant only “at this stage”.
What It Means for US Readers
The bond is a US dollar security, so any US holder, directly or through a fund, still waits for new bonds. Nothing here is investment advice, and the ministry’s notices do not name the committee’s members.
The ministry’s August notice says it is not an offer of securities in the United States under the 1933 Securities Act. The future Eurobond would be priced as a spread over US Treasuries, so US yields at issue would set its coupon.
The IMF, which reviewed the warrant terms, and the World Bank are both based in Washington. In April the G20 presidency’s co-chair was Francis Brooke, a US Acting Under Secretary for International Affairs.
What Is Not Known
No source gives a date for launching the exchange offer or closing the bond exchange. The ministry said only on 29 June that it intends to act in the coming months.
The ministry said non-financial terms were still open in August, and no source says they are now settled. The report does not name the three official lender agreements that remain unsigned.
It is not known whether the July 2026 payment dates in the June terms will be moved. The ratings in the report are dated 19 March 2026, so they may since have changed.
The ministry’s notices do not name the committee’s members, and it is not known whether the warrant will bring in new money. The OCC said actual new money would be a mitigating factor.
What Comes Next
Ethiopia said on 29 June it would use an exchange offer and/or a consent solicitation, a form of holder vote. That step needs agreed non-financial terms, and the OCC says it will watch the warrant closely.
The report calls Senegal’s request for Common Framework treatment “a major test” of recent improvements. It says IMF staff and Senegal agreed on 1 September 2026 on a 36-month programme of about US$2.2 billion.
Frequently Asked Questions
What does the roundtable report say about Ethiopia?
It says Ethiopia is the only tracked case with a bond exchange still pending. It calls the restructuring well advanced, with 11 of 14 official lender agreements signed.
How much is Ethiopia’s defaulted bond worth?
The bond is a US$1 billion 6.625% note that fell due in 2024. The June deal offers holders a new US$880 million bond, a 12% haircut.
When will the bond exchange close?
No source gives a date. Ethiopia said on 29 June that it would launch the exchange in the coming months.
What is the New Money Warrant?
It lets holders buy a future Ethiopian Eurobond of up to US$1 billion at par. That bond would pay 450 basis points above six-year US Treasuries.
Does this affect US investors?
Only those who hold the defaulted bond, directly or through emerging market funds, face the wait. This article is not investment advice.
Sources: Global Sovereign Debt Roundtable, 7th Cochairs Progress Report, 14 October 2026 (PDF); Ministry of Finance, agreement in principle, 29 June 2026; Ministry of Finance, OCC assessment, 21 August 2026; Ethiopian Business Review, 15 October 2026; The Reporter Magazine, 15 October 2026; Birr Metrics, 15 October 2026; Capital, 22 August 2026; World Bank, GSDR 6th Cochairs Progress Report statement, 15 April 2026; World Bank, About the GSDR; The EastAfrican, 29 August 2026 (all accessed 16 October 2026).