Individual bondholders finally excluded from Debt Exchange Programme
Resistance mounted by the Ghana Individual Bondholders Forum (IBF) has paid off as government has finally excluded individual bondholders from its debt exchange programme.
In a statement issued by the Finance Ministry on Tuesday, January 31, 2023 – the extended deadline for participation of individual bondholders and financial institutions in the debt programme – the Finance Ministry noted that, the decision to exclude individual bondholders is premised on engagements with the leadership of the IBF.
Its decision is also in view of the acceptance of the debt programme by the Ghana Association of Banks (GAB), Ghana Insurers Association (GIA) and the Ghana Securities Industry Association (GSIA).
According to the Ministry, it will, on Thursday February 2, 2023, publish a revised and final memorandum on the debt exchange programme to reflect the new agreements made with the GAB, GIA and GSIA as well as the exclusion of individual bondholders from the debt programme.
Despite completely excluding individual bondholders from the debt programme, the Ministry however, offered individual bondholders the opportunity to maintain hold of “existing or old bonds” after the successful rollout of the debt exchange programme.
Per the Ministry, “upon a successful DDEP there will be very few of the ‘old bonds’ in circulation, and likely limit its tradability. In this regard, the Government is pleased to make available the following alternative offer to encourage all individual bondholders to participate in the Exchange”
i. All individual bondholders who are below the age of 59 years will be offered instruments with a maximum maturity of 5 years, instead of 12 years, and a 10% coupon rate;
ii. All retirees (including those retiring in 2023) will be offered instruments with a maximum maturity of 5 years, instead of 12 years, and a 15% coupon rate.
Meanwhile, Government has extended the deadline for the Domestic Debt Exchange Programme (DDEP) to February 7, 2023.
The Finance Ministry in a press release on Tuesday added that a new settlement date of Tuesday, February 14, 2023, will be confirmed via the new Exchange Memorandum.
The original deadline for the Programme expired at 4 pm on Tuesday, January 31, 2023.
Amidst lots of disagreement following the announcement of DDEP, the Ministry said it “has made significant progress with all stakeholders, including financial sector industry associations and representative groups of individual bondholders, with respect to their participation in the Programme.”
