Ethiopia will hold an call with its international bondholders on Thursday, a senior finance ministry official said, as the country heads towards default, having said last week it could not pay a $33 million bond coupon due on Monday…
The Finance Ministry said on Friday that talks with a group of bondholders had broken down as the two sides disagreed over how long to extend the maturity and spread out the repayments of its single $1 billion international bond maturing in December 2024, Non-payment of the bond coupon would put Ethiopia, which requested a debt overhaul under the G20 Common Framework in early 2021, on track to default after the grace period of 14 days expires.
Ethiopia had – until now – serviced interest payments on its international bond, However, given recently secured debt service suspension agreements with official creditors, including China, and some commercial lenders, the finance ministry said in a statement on Monday that it would “seek a broadly similar treatment” from bondholders, “It would be important to treat all our creditors equitably,” the ministry said in a statement, which seemed to echo comments last week that a payment was not on the cards.
But in separate comments made to Reuters on Monday, Eyob Tekalign, State Minister of Fiscal Policy and Public Finance, told Reuters that “authorities’ intention is to remain current on our obligations”, He also said there would be a call with investors holding the international bond on Thursday, December 14.
The combined cost of the COVID-19 pandemic and a civil war in its northern Tigray region that ended in November 2022 has left Ethiopia, long seen as one of Africa’s most promising economies, struggling to pay its debts, The bonds were zigzagging on Monday, initially dropping more than 1.8 cents on the dollar before reversing losses to add 0.2 cents and trade at 60.995 cents at 1016 GMT, according to Trade-web data, Outlines of the various proposals exchanged between Ethiopia’s government and its bondholders in the statement on Friday showed the difference center’s around the maturity as well as the size of the coupon.
