Ethiopia Bond Rallies as Restructuring Limits Haircut to 15%

Ethiopia’s sole eurobond rallied almost 3 cents on the dollar after the government reached an agreement in principle with bondholders on a restructuring that would impose a relatively modest 15% haircut on the $1 billion note it defaulted on two years ago.

The East African nation’s bond added 2.61 cents to 110.09 as at 4:26 p.m. London. The price reflected a relatively high coupon on the new bond to be issued under the proposed terms as well as its front-loaded principal repayments.