DDE: Individual Bondholders Forum reiterates exclusion of members from debt programme
The Individual Bondholders Forum (IBF) has reiterated calls for the exclusion of individual bondholders from the debt exchange programme.
Congratulating the Ghana Association of Banks (GAB), on reaching a deal with the government with regards to the debt programme, the forum averred that unlike banks that are set to benefit from various regulatory incentives such as reductions in capital adequacy ratio and cash reserve requirements, individual bondholders have “no fall back or incentives “ and hence will be “condemned to shackled penury “ if included in the debt programme.
The forum has argued that individual bondholders account for only 11% of government’s eligible bonds, hence their exclusion from the debt programme will not in anyway impact government’s ability to achieve the required 80% participation rate.
“We congratulate both parties for reaching a deal towards the reengineering of our economy.
“With the banks onboarding the DDEP, the government is set to reach its 80% target,” it stated.
“We urge government to stay focused on its responsibility to protect its citizens and for that matter absolutely exempt individual bondholders.
“We maintain that cutting government expenditure and optimizing revenue is the sure winner for Ghana in these difficult times,” the statement added.
Gov’t, banks agree on new terms for debt programme
The Ghanaian government and the Ghana Association of Banks (GAB) have reached an agreement on the terms of participation for banks in the Domestic Debt Exchange Programme (DDEP).
The new agreement includes a 5% coupon for 2023, as well as a single coupon rate for each of the 12 new bonds, resulting in an effective coupon rate of 9%.
The deal also includes greater clarity on the operational framework and terms of access to the Ghana Financial Stability Fund (GFSF), as well as the removal or amendment of clauses that empower the Republic to vary the terms of the exchange at its discretion.
The GAB has stated that member banks’ participation is subject to their internal governance and approval processes, with a deadline of January 30 for participation.
The Ghanaian government has hailed the agreement as a “significant milestone” towards addressing economic challenges and restoring macro-economic stability.
