Posted 12/8/2023, 7:31:00 PM
Ethiopia Misses Bond Payment, Triggering Default on $1 Billion International Debt
- Ethiopia said it will not make a $33 million bond interest payment due on Dec. 11, triggering a default on its $1 billion international bond
- Talks between Ethiopia and key bondholders broke down without an agreement before the payment deadline
- Ethiopia cited "acute external liquidity pressures" due to the economic impacts of the pandemic and recent civil war
- Ethiopia outlined an initial debt restructuring proposal to bondholders involving pushing back the 2024 repayment date, cutting the coupon rate, and staggering more interim payments
- The bond is currently trading around 61 cents on the dollar with a 66% yield as investors price in the high risk of default