"Ghana missed interest payment sparks default coverage payout"

" Ghana missed interest payment sparks default coverage payout \r\n\r\nA panel of investors and banks has ruled Ghana\u2019s missed coupon payments on its foreign denominated bonds counts as a failure-to-pay event, paving the way for a payout of the default-insurance contracts tied to the country\u2019s debt.\r\n\r\nThe Credit Derivatives Determinations Committee (CDDC) made the decision at a meeting held on Monday, according to a notice on the panel\u2019s website on Friday. Ghana skipped payment of interests on Jan. 18 of a $1 billion eurobond maturing in 2026. The missed payment triggered a 30-day grace period, which eventually expired at the end of the day on Feb. 17.\r\n\r\nThe ruling triggers the payout of the insurance protection on Ghana\u2019s sovereign debt. Credit-default swaps covered a gross $66.4 million and net $34.4 million of Ghana\u2019s debt as of Feb. 10, according to data from the Depository Trust & Clearing Corp.\r\n\r\nThe nation\u2019s eurobonds were unchanged following the decision, with the majority of the notes trading at a discount of 60-65% versus their face value, according to CBBT pricing compiled by Bloomberg.\r\n\r\nThe swaps panel had already ruled in January that Ghana\u2019s decision to suspend debt servicing on its eurobonds, commercial term loans and most of its bilateral debt met the definition of a \u201cpotential repudation\/moratorium.\u201d This happened before the grace period on the first missed payment had expired.\r\n\r\nGhana has been engaging investors since November to restructure about $30 billion of its $46 billion in local and international debt. It recently completed the first part of a domestic restructuring, with investors exchanging 83 billion cedis ($6.5 billion), or 64% of holdings, for new securities, against an overall target of 80%. It aims to start \u201csubstantive\u201d discussions with international bondholders and their advisers in coming weeks, Minister of Finance Ken Ofori-Atta said Feb. 16.\r\n\r\nMeanwhile, the African nation has also kicked off talks with China to restructure bilateral loans."

"Ghana missed interest payment sparks default coverage payout"

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