Ghana pushes back debt swap deadline again
The Ghanaian government has extended the registration deadline for its domestic debt exchange program to January 31, 2023, according to a statement from the Ministry of Finance.
This marks the fourth extension, with the previous deadline having been January 16, 2023. The ministry cited the need for further engagement with institutional and individual bondholders as the reason for the extension.
The debt exchange program, which was announced earlier, involves GH₵137.3 billion and suspends interest payments on foreign debt.
Under the original plan, local bonds were to be exchanged for new ones maturing in 2027, 2029, 2032 and 2037, with annual coupons set at 0% in 2023, 5% in 2024 and 10% from 2025 until maturity.
However, the terms have since been modified to include eight additional instruments, bringing the total number of new bonds to 12, with one maturing each year from 2027 to 2038.
The inclusion of pension funds in the program had been widely criticized by labor and advocacy groups. As a result, the government has since decided to exempt pension funds from the program.
Individual bondholders, however, have been included in the program and have voiced opposition to their inclusion, arguing that they will lose about 88.2% of their investments at the current inflation rate.
This, according to the Ghana Individual Bondholders Forum, will negatively impact the livelihoods of 1.3 million bondholders and their dependents.
The forum estimates that bondholders will lose 71% of their investments when discounted at current Treasury Bill rates and 50% when the coupon rates face a “haircut.”
