Three debt exchange offers targeting GHS 47.8bn debt reduction await results announcement after conclusion on Friday
Last week marked the closure of three alternative debt exchange offers, namely the extended GoG USD-denominated bond, Cocoa bills, and pension funds exchange offers.
According to GCB Capital Research, these offerings concluded on Friday, August 18, 2023, with announcements of the results anticipated in the coming days. The settlement for these exchanges is scheduled for August 25, 2023, subject to any discretionary extensions granted by the issuers.
Combined, these three exchange offers are targeted to encompass approximately GH¢47.84 billion. A successful outcome would contribute to an aggregate of GH¢122.91 billion in bonds exchanged under different iterations of the debt exchange program, excluding cocoa bills. This achievement represents approximately 50% of the total outstanding domestic debt.
The finalization of these three debt exchange offers is anticipated to provide closure to the Domestic Debt Exchange Programme concerning publicly listed bonds and bills. Possible future iterations might focus on diverse targets such as commercial bank loans, Interim Payment Certificates financed by banks, non-marketable debts issued to contractors, and debts related to banks and the energy sector, including those linked to Independent Power Producers (IPPs).
The conclusion of these offers is poised to enhance interest savings resulting from the debt exchange, pending the finalization of external debt operations. This, in turn, could bolster the fiscal position and inspire investor confidence.
Meanwhile, the initial DDEP’s first semi-annual cash coupon payments are due today, with the government’s coupon obligation amounting to approximately GH¢2 billion. The Government’s execution of the Payment in Kind (PIK) adjustments to outstanding principals, as per the offer terms, is also underway.
Completion of these payments is expected today, August 22, 2023. The successful settlement of this coupon payment installment holds pivotal significance for market sentiments and the evaluation of these bonds by investors.
