The government and representatives of bondholders have reached an agreement in principle on the restructuring of the country’s Eurobonds.
This development is set to ease Ghana’s financial burdens and is a key step towards securing approval from the International Monetary Fund (IMF) for the second review of its economic programme.
Following intense negotiations, the Government has agreed in principle with international bondholders to restructure its Eurobond debt.
Bondholders now have two options: either to accept discounted bonds with reduced interest and maturity dates between 2026 and 2029, resulting in a 37% reduction in value or accept a second option, limited to $1.6 billion, which offers new bonds at face value, with a primary bond maturing in 2037 and paying a 1.5% interest rate, though past due interest will be adjusted.
For Ghana, this agreement means significant financial relief.
Bondholders are expected to forgo about $4.7 billion, providing the government with an estimated $4.4 billion in cash-flow relief during the IMF programme period.
The International Steering Committee of bondholders who hold 40% of Ghana’s external debt, and the regional steering committee, who hold 15% have asserted that the agreement matches the parameters set by the IMF.
In the coming weeks, the government will start a consent solicitation process to get approval from individual bondholders.
This will be followed by a formal launch once the final documents are ready.
The new deal also requires the government to publish public debt information every six months to assure bondholders of transparency and to ensure fair treatment among creditors.
These steps lead up to the IMF board meeting scheduled for June 28, where the board will review the staff’s assessment of the bondholder agreement.
The Approval of the second review of Ghana’s economic programme will depend on this assessment.
