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Fitch has issued another downgrade to Ethiopia’s credit rating, putting it squarely in junk territory with a ‘Restricted Default’ or RD status.

The credit rating agency has issued what it calls a “Long Term Issuer Default Rating” after the Ethiopian government failed to pay the first coupon on its outstanding USD one billion Eurobond due in full by December next year.

The USD 33 million coupon payment was due December 11, 2023, with a two-week grace

The Ethiopian government has claimed that although the payment is “affordable,” it would not be making it due to its desire to ‘treat debtors equitably.’

Bilateral creditors including China agreed to a debt payment suspension deal with the Ethiopian government a few weeks ago.
The Eurobond was secured in 2014 and used to fund the construction of industrial parks,
including the flagship Hawassa Industrial Park.

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The default rating is the latest in a series of four consecutive credit downgrades issued by Fitch Ratings since December 2022.

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