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An aerial shot of the city of Accra in Ghana at night. Picture: 123RF/wirestock
Accra — Ghana says it has reached an agreement in principle with two bondholder groups to restructure $13bn of international debt, taking it a step closer to completing its debt overhaul that has been years in the making.
Under the agreement, bondholders will forego about $4.7bn of their claims and provide cash-flow relief of about $4.4bn during the period of Ghana’s current financial support programme with the IMF that is scheduled to end in 2026.
“The formal launch of the consent solicitation is expected in the upcoming weeks,” the government said in a statement.
The agreement would provide Ghana a path to economic recovery through debt relief and provision of cash flow, the committee representing international bondholders said in a statement, while welcoming the deal.
The deal comes a week after Ghana struck another agreement with its bilateral creditors, paving the way for the IMF’s executive board to sign off on a $360m disbursement after the second review of Ghana’s $3bn programme. The board is scheduled to meet on June 28.
The West African gold and cocoa producer defaulted on most of its $30bn in external debt in 2022, after the fallout from the Covid-19 pandemic, the war in Ukraine and higher global interest rates worsened economic strains. It started formal talks with two groups of bondholders in mid-March — a group of Western asset managers and hedge funds and another one including regional African banks.
The negotiations, however, stalled in April after the proposed deal failed to meet the IMF’s debt sustainability analysis requirements, and both sides were under pressure to finalise an agreement before December elections in Ghana.
Investors are watching Ghana’s debt restructuring closely after Zambia’s bondholders signed the southern African nation’s own debt overhaul which was more than three years in the making.
Ghana’s international bonds inched higher on the day, reversing earlier losses, with most of the curve bid between 51-53.5 cents in the dollar, Tradeweb data showed.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Ghana reaches agreement on reworked $13bn bond
Accra — Ghana says it has reached an agreement in principle with two bondholder groups to restructure $13bn of international debt, taking it a step closer to completing its debt overhaul that has been years in the making.
Under the agreement, bondholders will forego about $4.7bn of their claims and provide cash-flow relief of about $4.4bn during the period of Ghana’s current financial support programme with the IMF that is scheduled to end in 2026.
“The formal launch of the consent solicitation is expected in the upcoming weeks,” the government said in a statement.
The agreement would provide Ghana a path to economic recovery through debt relief and provision of cash flow, the committee representing international bondholders said in a statement, while welcoming the deal.
The deal comes a week after Ghana struck another agreement with its bilateral creditors, paving the way for the IMF’s executive board to sign off on a $360m disbursement after the second review of Ghana’s $3bn programme. The board is scheduled to meet on June 28.
The West African gold and cocoa producer defaulted on most of its $30bn in external debt in 2022, after the fallout from the Covid-19 pandemic, the war in Ukraine and higher global interest rates worsened economic strains. It started formal talks with two groups of bondholders in mid-March — a group of Western asset managers and hedge funds and another one including regional African banks.
The negotiations, however, stalled in April after the proposed deal failed to meet the IMF’s debt sustainability analysis requirements, and both sides were under pressure to finalise an agreement before December elections in Ghana.
Investors are watching Ghana’s debt restructuring closely after Zambia’s bondholders signed the southern African nation’s own debt overhaul which was more than three years in the making.
Ghana’s international bonds inched higher on the day, reversing earlier losses, with most of the curve bid between 51-53.5 cents in the dollar, Tradeweb data showed.
Reuters
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