The Ethiopian Finance Ministry announced that it reached an agreement in principle with a bondholder committee regarding the restructuring of a $1 billion eurobond, Reuters reported June 29. Addis Ababa said the International Monetary Fund confirmed the deal was consistent with its debt-sustainability targets, and that official creditors had not objected to it, with the terms of the agreement involving a 12% nominal haircut and the creation of a new financial instrument granting eurobond holders subscription rights for a future bond issuance by Ethiopia.

Ethiopia requested a restructuring of its debt under the G20 Common Framework in 2021 and defaulted on the Eurobond's coupon payment in late 2023, after which it reached an agreement with the IMF in July 2024. The country has since made steady progress in restructuring its debt with official creditors, reaching a memorandum of understanding in July 2025 that grants it $3.5 billion in financial relief. Ethiopia also reached a preliminary deal to restructure its $1 billion Eurobond in January, but the deal was rejected by official creditors who said it breached comparability of treatment provisions under the G20 Framework.