Ethiopia is holding early talks with Chinese lenders to partially convert $5.38 billion of debt into yuan-based financing, according to Bloomberg. The initiative is meant to lower costs and expand trade cooperation.
The development sent Ethiopia’s Eurobond up 4.3%, the sharpest increase since 2021.
National Bank Governor Eyob Tekalign confirmed that discussions with Chinese institutions are ongoing. Ethiopia, which defaulted in 2023, is restructuring $15 billion in total external obligations with support from the IMF and official creditors.
Authorities expect to conclude government-to-government deals before the end of the year and wrap up talks with private bondholders by March 2026.