Ethiopia has become a defaulter after failing to pay $33 million on the coupon of its international sovereign bond, media reported on Tuesday.
The Ethiopian government had failed to pay interest on $1 billion of international bonds as of December 22, the last international banking business day before the grace period expired, the report added.
Although the payment was originally scheduled for December 11, the East African nation technically had until Tuesday to fulfill the obligation, benefiting from a 14-day “grace period” clause embedded in the bond.
On December 16, S&P Global Ratings said that Ethiopia had entered into selective default, a situation in which a debtor selectively defaults on a particular issue or class of obligations while continuing to make timely payments on other issues or classes.
The development came days after the Ethiopia’s finance ministry announced
that it would “treat all its external creditors equitably”. Ethiopia reached an agreement with creditors to suspend debt service on $1.5 billion of debt, according to the country’s central bank governor. wt wire and bank info
