Ethiopia’s only international bond climbed on Monday after the government announced a preliminary restructuring agreement with bondholders, Tradeweb data showed. The bond gained 2.5 cents, trading at 109.5 cents on the dollar, reflecting renewed investor confidence after months of uncertainty.
The initial deal emerged from a second round of negotiations concluded in early January, following earlier talks that collapsed in September. Those first discussions ended in deadlock, as creditors and officials failed to agree on restructuring terms for the troubled debt.
Ethiopia defaulted on the bond two years ago after seeking to rework its external obligations under the G20 Common Framework initiative. The framework requires equal treatment for all creditors during restructuring, adding complexity and length to Ethiopia’s debt negotiations.
Last July, Addis Ababa finalised a restructuring agreement with bilateral creditors, unlocking more than $3.5 billion in cashflow relief. That agreement cleared the path for prolonged talks with bondholders, which have now produced a tentative breakthrough watched closely by markets.