Gov’t to Officially Launch External Debt Exchange Offer in Coming Days, Says Finance Minister Amin Adam
Finance Minister, Dr. Mohammed Amin Adam, has announced plans by the Government to launch a debt exchange offer for investors in the coming days, marking a critical step in the nation’s external debt restructuring initiative.
The debt exchange offer is indicative that the government remains committed to achieving its debt targets set forth under the International Monetary Fund (IMF) programme.
In a press briefing on Thursday, August 29, Dr. Adam emphasized that the exchange offer is based on terms provisionally agreed upon with bondholders on June 24, which include significant concessions to ensure equitable burden-sharing among domestic, official, and commercial creditors.
“The exchange offer reflects the terms agreed in principle with bondholders on 24th June including important concessions from our bondholders, ensuring a fair burden sharing between our domestic, official, and commercial external creditors,” he quipped.
According to the Finance Minister, the exchange period will be open for 21 days, and the government is counting on robust participation from bondholders both domestically and internationally.
Dr. Adam expressed confidence that all outstanding bonds would be exchanged for new securities, which will offer investors a choice between two options: a par option that entails no nominal haircut but comes with lower interest rates, and a discount option that features a 37% nominal haircut but provides higher interest rates.
The debt exchange is expected to generate substantial fiscal relief, with anticipated savings of approximately $4.4 billion in debt service costs and the cancellation of $4.7 billion over the course of the IMF programme.
The initiative is aligned with the government’s objective of reducing the debt-to-GDP ratio to 55% by the end of 2028, a target deemed essential for restoring fiscal sustainability and stabilizing the Ghanaian economy.
