Ethiopia defaults on debt payment

Ethiopia failed to make $33 million “coupon” payment on its only international government bond.

LONDON:

Ethiopia became Africa’s third default on Tuesday after it failed to make a $33 million “coupon” payment on its only international government bond.

Africa’s second most populous country announced earlier this month that it intended to formally go into default, having been under severe financial strain in the wake of the Covid-19 pandemic and a two-year civil war that ended in November 2022.

Read Ethiopia nears default as talks falter

It had been supposed to make the payment on Dec 11, but technically had up until Tuesday to provide the money due to a 14-day ‘grace period’ clause written into the $1 billion bond.

According to two sources familiar with the situation, bondholders had not been paid the coupon as of the end of Friday Dec 22, the last international banking working day before the grace period expires.

Ethiopian government officials did not respond to requests for comment on Friday.

Published in The Express Tribune, December 27^th, 2023.

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