Ethiopia’s defaulted Eurobond slipped on Tuesday as international creditors considered possible legal action following the breakdown of restructuring talks with the government, Reuters reported.

The $1 billion bond due in 2024 fell by one cent to 95 cents on the dollar, according to market data, though it remains near its highest level since early 2021. The decline came after both sides confirmed that discussions had ended without agreement.

Talks between Ethiopia and the ad hoc bondholder committee, which represents more than 40 percent of the 2024 notes, collapsed after both parties agreed to terminate negotiations. The committee said it had offered a proposal that included a “material upfront haircut” on the debt, in exchange for a mechanism to increase repayments if Ethiopia’s export earnings improved.

In a statement, the bondholders said Ethiopia’s debt challenge remained “a liquidity rather than solvency issue,” citing the country’s consistent economic performance. They also noted that the government’s ability to agree on financial terms was constrained by commitments made to official bilateral creditors under the G20 Common Framework.

Ethiopia’s Ministry of Finance has maintained that its debt treatment process is guided by the principles of comparability across creditors and in line with the memorandum of understanding reached in July with its official creditor committee to restructure $3.5 billion of debt. That agreement is a prerequisite for any deal with private creditors.

The possibility of legal action by bondholders introduces further uncertainty to Ethiopia’s debt restructuring efforts and may complicate future access to international capital markets, even as official creditor talks continue.