The government of Ghana has resumed payments on its Eurobond debt following the successful completion of the Debt Exchange Programme with bondholders last week. According to JOYBUSINESS, a total of $520 million has been disbursed to Eurobond holders, which includes $120 million paid as a consent fee to bondholders who agreed to exchange their old bonds under specified terms.
This consent fee, considered a special incentive to encourage bondholders’ participation in the Debt Exchange Programme, amounted to $10 per $1,000 of recognized principal for the exiting notes. Additionally, $320 million has been paid to investors as part of coupon payments that were originally due but were frozen following the government’s debt service suspension in 2022.
Under the debt restructuring agreement, the government committed to making these coupon payments once the debt deal was finalized. Payments are set to resume fully in January 2025, with subsequent payments scheduled for July 2025. This forms part of the initial plan for coupon repayments in the coming year.
The government remains confident that the Bank of Ghana has accumulated sufficient foreign reserves to facilitate debt servicing. The central bank’s Economic and Financial Data report, ending August 2024, showed the country’s international reserves stood at $7.5 billion, covering 3.4 months of imports.
Ghana recently concluded its Eurobond Debt Exchange Programme, achieving nearly 100% participation from bondholders. The programme restructured $13 billion of debt, enabling the government to resume servicing its obligations to creditors.
Meanwhile, repayment of bilateral creditors is set to begin in 2026. The Finance Minister, Dr. Mohammed Amin Adam, revealed that a proposal has been submitted to the Cabinet on investment strategies for the creation of a Sinking Fund. This fund aims to alleviate the fiscal burden when repayments to bilateral creditors begin in 2026.
SOURCE: Joy Business
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