Ethiopia reaches AIP to shrink $1bn Eurobond to $880m, adds tradable New Money Warrant
On June 29, 2026 Ethiopia announced an Agreement in Principle with an Ad Hoc Committee to exchange its defaulted $1bn Eurobond for a new $880m bond (12% principal reduction) paying 6.15% with amortized repayments to July 15, 2029, plus a detachable New Money Warrant (cash cap $90m) and $99.375m of past-due interest.
The desk brief
On June 29, 2026 Ethiopia announced an Agreement in Principle with an Ad Hoc Committee to exchange its defaulted $1bn Eurobond for a new $880m bond (12% principal reduction) paying 6.15% with amortized repayments to July 15, 2029, plus a detachable New Money Warrant (cash cap $90m) and $99.375m of past-due interest.
The AIP narrows the stock of defaulted Ethiopian bond principal and alters recovery mechanics by adding a tradable warrant that ties future upside to a potential new issuance. If implemented via an exchange offer, participating bondholders receive a shorter-dated USD bond plus contingent upside; official creditor scrutiny of the warrant could still require adjustments to comparability of treatment.
Finalise non-financial terms, secure Official Creditor Committee sign-off and launch the exchange offer.
Sources & verification
Developing storyFurther independent confirmation is required.
- Ethiopia and Bondholders Reach New Preliminary Deal on $1 Billion Eurobond Restructuringecofinagency.com (opens in a new tab)
- Ethiopia Introduces “New Money Warrant” to Break Eurobond Restructuring Deadlockcapitalethiopia.com (opens in a new tab)
Public references supporting this brief.