Why bondholders rejected Addis’ $1bn debt repayment plan

Ethiopia's $1 billion Eurobond restructuring talks collapsed for the second time in seven months. Bilateral creditors represented by the Official Creditor Committee (OCC) rejected the preliminary deal reached with bondholders on January 2, 2026, arguing it failed to comply with the Comparability of Treatment (CoT) principle under the G20 Common Framework. The deal included a Value Recovery Instrument (VRI) linking payments to export performance, but bilateral lenders said the macroeconomic environment was not conducive. Ethiopia now faces prolonged restrictions on international financing.