DDEP for Dollar Bonds: Gov’t: invites holders to exchange $809m in dollar-denominated bonds
The government has unveiled a new Domestic Debt Exchange Programme (DDEP) aimed at U.S. dollar denominated domestic notes and bonds, according to a statement released by the Ministry of Finance on July 14, 2023. The programme seeks to target approximately $809 million worth of U.S. dollar denominated bonds issued domestically by the government and governed by Ghanaian law.
In the statement, the government announced its invitation to Eligible Holders to exchange their holdings of U.S. dollar denominated domestic notes and bonds for a package of new bonds to be issued by the Republic. It emphasized that this invitation is distinct from the previous exchange launched in December 2022 and concluded in February 2023, and does not involve any cedi-denominated securities.
The government underscored the continued relevance of the previous exchange and its justifications, citing the need to restore sound public finance, achieve sustainable debt levels, and stimulate economic growth following the adverse impacts of the COVID-19 pandemic and the global economic shock arising from the war in Ukraine.
Eligible holders of the bonds, governed by Ghanaian law and denominated in U.S. dollars, will have the opportunity to submit their holdings for new benchmark Government of Ghana bonds denominated in U.S. dollars. The new bonds will carry the same aggregate principal amount as the Eligible Bonds, along with applicable capitalized accrued and unpaid interest. Additionally, the new bonds will have a lower average coupon and extended average maturity compared to the Eligible Bonds.
Highlighting the criticality of successfully completing the domestic debt exchange, the government emphasized its significance in both the debt reduction programme and the ongoing discussions with the International Monetary Fund (IMF). Successful participation in the exchange is expected to unlock international support and assist Ghana in achieving its debt targets. The government called for the full participation of all Eligible Bond holders in the programme.
The government in the statement expressed its anticipation of overwhelming support for the exchange, cautioning that failure to participate could lead to a more severe economic crisis, including prolonged closure from international markets, further domestic economic instability, and reduced fiscal resources to support vulnerable sectors.
Read details of the new DDEP for Dollar Bonds below:
