Ghana: Haircut on Eurobond holdings pegged at 30%-40% with coupons capped at 5% for investors
Finance Chief Ken Ofori-Atta, has unveiled a potentially far-reaching plan to restructure the nation’s Eurobond holdings, a move that could see bondholders facing a notable nominal haircut of between 30% and 40%.
In addition to this, coupons on the restructured Eurobonds may be subject to a ceiling of 5%, with final maturities not exceeding 20 years, marking a pivotal shift in Ghana’s external debt management strategy.
Addressing investors in London, Mr Ofori-Atta stressed that Ghana harbors no predilection for or against any specific financial instrument and affirmed that the positions of all investors would be accorded due respect during the restructuring process.
The Finance Chief emphasized that the objective is to arrive at a solution that aligns with the IMF Debt Sustainability Analysis, is financially viable, legally sound, and politically acceptable, thereby fortifying the nation’s economic resilience.
In pursuit of a win-win outcome, Mr Ofori-Atta noted the importance of simplicity and clarity in the restructuring process, with an aim to ensure that the solution can be comprehensively communicated to the domestic public and efficiently priced by the market, thus expediting the nation’s economic rejuvenation without undue delay.
Highlighting the remarkable progress achieved, the Finance Minister underscored that a Staff-Level Agreement with the IMF was reached on October 6th, 2023, during the first review of the program.
He acknowledged the dedication and swiftness demonstrated by the nation in implementing the IMF program, despite challenging circumstances.
Ghana’s Eurobond restructuring ambitions are set against a backdrop of significant outstanding Eurobond payments, estimated at $13.10 billion, as detailed in the 2022 Annual Debt Report released by the Ministry of Finance.
This substantial debt burden underscores the urgency and significance of the ongoing restructuring efforts, as Ghana navigates the path to economic stability and resilience.
