A group of international creditors began restricted talks with Ethiopia, as the two sides work to restructure a $1 billion defaulted bond, according to people familiar with the matter.
A group of bondholders under a creditor committee have entered into non-disclosure agreements with Ethiopia, according to the people, who asked not to be identified because the talks are confidential. Government officials and representatives from the group are set to kick off talks this week in Paris, they said.
A representative from the group didn’t immediately reply to a request for comment, while Ethiopian central bank Governor Eyob Tekalign Tolina — who is part of his government’s negotiating team — didn’t also respond.
The term “restricted” in the context of such negotiations refers to talks covered by non-disclosure requirements as well as temporary trading limitations because the issues under discussion could be market-sensitive.
VR Capital Group Ltd., Farallon Capital Management LLC and Morgan Stanley Investment Management are part of the group, Bloomberg has reported previously.
The Horn of Africa nation defaulted on its only Eurobond in December 2023 by failing to make an interest payment. The note traded at 93.2 cents on the dollar on Monday, rising for a sixth straight session.
Last year, Ethiopia proposed that holders take an 18% loss in a debt restructuring, which bondholders rejected. They have also challenged reviews of the country’s $3.4 billion program with the International Monetary Fund, saying the lender’s export projections remain “significantly undervalued.”
The nation reached a deal in March with bilateral creditors such as China and France to restructure $8.4 billion of international debt.
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With assistance from Kerim Karakaya and Fasika Tadesse.
