Negotiations between Ethiopia's Ministry of Finance and an Ad Hoc Committee of international bondholders over restructuring the country’s one-billion-dollar Eurobond reached a deadlock on May 27, 2026, following three weeks of restricted discussions. Bondholders rejected a revised proposal for the 6.625pc Notes due in 2024, which included a 12pc principal haircut, a 6.15pc interest rate, and a new maturity date of July 15, 2029. Although the Official Creditor Committee (OCC) validated the offer as compliant with the Comparability of Treatment (CoT) principle, the private creditors declined the terms. A primary point of contention was the removal of a Value Recovery Instrument (VRI), which would have triggered higher payments if the economy outperformed expectations. The OCC insisted on the VRI’s removal, citing a fast-evolving macroeconomic environment unsuitable for the instrument. As a result of the stalled talks, Finance Minister Ahmed Shide informed Parliament that Eurobond payments initially planned for the current budget year will be transferred to the next during his last nine months report. The government is now evaluating alternative options, including a potential exchange offer, to resolve the status of the 2024 Notes with an aim to transition the country to moderate-risk category, a shift critical to the country's broader market-based reforms.

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