A large portion of bondholders who took part in Ghana’s Eurobond Debt Exchange Programme have chosen the “disco” option for their new bonds. Under this option, investors will face a 37% haircut on their original holdings, and in exchange, they will receive interest payments of 5% from 2024 through July 2028, followed by a 6% rate thereafter. These bondholders will receive three new bond instruments.
Meanwhile, other bondholders opted for the “par” menu, which allows them to avoid any nominal losses but yields only 1.5% interest on bonds maturing in January 2037.
These terms were outlined in a consent document provided by bondholders, who agreed to swap their old bonds for new ones as part of the Eurobond Debt Exchange Programme. The bondholders also emphasized that the successful conclusion of the exchange is crucial to Ghana’s overall debt restructuring efforts under its International Monetary Fund (IMF) programme.
The exchange of securities for the new bonds is scheduled for around October 9, with the final settlement process to be completed soon after, according to a statement from the investors.
About the Debt Exchange Programme
The Eurobond Debt Exchange Programme achieved a 98.6% participation rate from bondholders, reflecting strong engagement. This move is a key part of the government’s strategy to restructure approximately $13 billion in external debt. The programme, launched on September 5, 2024, on the London Stock Exchange, invited eligible Eurobond holders to swap their existing notes for new ones, with a choice between two different bond structures.
Ghana’s Finance Minister, Dr. Mohammed Amin Adam, highlighted the importance of this exchange in securing the IMF’s approval for the third review of its programme. He also noted that the debt exchange would significantly reduce the country’s debt burden.
“Thanks to this development and other initiatives, Ghana is now on track to achieve a debt-to-GDP ratio of 55% by 2028,” Dr. Adam stated.
SOURCE: JoyBusiness
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