Ghana shifts Eurobond revamp timeline as bilateral talks linger
Ghana says it now expects to reach an agreement on debt restructure with eurobond holders by the end of the year, as talks with bilateral creditors drag on.
“We would want to conclude with the eurobond debt holders by year-end,” Minister of Finance Ken Ofori-Atta said in an interview in the capital, Accra, on Friday. “We’re really pushing to see whether we can conclude with the bilaterals and sign the memorandum of understanding by the end of this month,” he said, referring to official government creditors.
The West African nation, which defaulted on a eurobond payment earlier this year, had expected to reach a deal with the private creditors by a self-imposed deadline of end-September. That’s because it thought it could clinch a memorandum of understanding on specific terms of debt relief with official creditors.
A deal with the official creditors is necessary to determine the terms of debt reorganization Ghana would propose to the eurobond investors.
Fitch Ratings on Tuesday said an agreement with official creditors might only be reached by the end of the year, meaning a eurobond revamp accord may only come through by mid-2024.
The country’s dollar bonds maturing in 2032 rose a sixth day, by 0.41 cents to 45.65 cents on the dollar. Notes maturing in 2051 gained 0.28 cents to 44.20 cents on the dollar.
Ghana is reorganizing most of its debt, valued at $50 billion at the end of April, to make it sustainable under a $3 billion International Monetary Fund program.
Swap Reopened
The country, which has reworked about $11.7 billion of domestic debt, or 85% of the target, reopened a domestic debt exchange on Thursday for those who didn’t participate previously to voluntarily swap their holdings for new securities.
“Participation in this administrative reopening would also further improve the cashflow position of the government and further support debt sustainability,” the Finance Ministry said.
Ghana faces the first review of the extended credit facility at the end of this month. The IMF program was being implemented well so far, Abebe Aemro Selassie, director of the African Department of the IMF, said in a Sept. 7 interview.
“The authorities are doing what they need and we hope creditors will do what’s required,” Selassie said.
