Ethiopia bondholders disappointed by proposed bond haircut

NEW YORK (Reuters) – A group of foreign holders of Ethiopia’s international bond said on Wednesday it is disappointed with recent comments from the government regarding a possible 20% principal haircut on its $1 billion bond.

“The Committee does not view any such haircut as being consistent with its evaluation of Ethiopia’s economic fundamentals,” the group said via email, calling the government’s recent public statements “incompatible with a good-faith approach to debt restructuring.”

Ethiopia defaulted on its sole $1 billion international bond in December, but has made little headway in its restructuring since then.

The government took bondholders by surprise when it announced earlier this month that it aimed to reduce the principal of the bond to $800 million, which would indicate a 20% haircut, citing the need to match debt relief offered by official creditors.