Debt Restructuring: Government announces return to international capital markets for borrowing

The government of Ghana has announced that the country is back on the international financial markets after successfully completing the transaction of restructuring $13 billion in Eurobonds on October 8, 2024.

Back in June this year, the Ad Hoc Group of International Bondholders and government reached an agreement in principle for restructuring the outstanding Eurobonds.

The agreement was approved by the International Monetary Fund as compatible with the programme parameters and met the comparability of treatment requirements of the Official Creditor Committee for Ghana.

On September 5, 2024 with the backing of the Committee of Holders of the Republic of Ghana’s Eurobonds and government launched a consent solicitation for its proposal to all bondholders.

Following the conclusion of the transaction, over 90% of bondholders voted in favour of the deal.

According to a statement issued by the Presidency, the settlement and delivery of the new debt instruments are scheduled for October 9, 2024, after the World Bank longstop date on October 7, 2024.

It noted that on this date, old bonds will be exchanged for new securities under the revised terms while World Bank payments will be executed on or before October 30, 2024.

Additionally, more details on technical processes following the issue date, including related to the holding period can be found on the Ministry of Finance's website.

“Today, our economy has turned a corner. This landmark achievement ushers in a new phase of economic recovery, returning Ghana to a sustainable debt path and putting us back on the investor map. We’ve accomplished what everyone said was impossible – we decisively resolved Ghana’s debt overhang problem. This will allow Ghana to stabilise our finances and focus all our efforts on continuing the implementation of the ambitious reform program to improve the well-being of the Ghanaian people. We are thankful to our bondholders, the IMF and our official creditors for their support and collaborative engagement to arrive at this solution,” President Akufo-Addo stated.

“Today’s completion of the restructuring will help Ghana restore debt sustainability, reducing the debt stock by $4.7 billion and providing cash flow relief of approximately $4.4 billion in the next two years. The deal is already positively influencing our macro-financial situation. The increasing market confidence in Ghana and our economic trajectory has significantly reduced the inflation rate. Our growth projections are also more positive - Q2 of 2024 saw the highest quarterly GDP growth recorded in the past five years, at 6.9%. Our government takes pride in this progress and remains committed to advancing our reform agenda and attracting new investment to foster growth and job creation,” Minister of Finance, Dr. Amin Adam added.

The government also extended its gratitude to the Steering Committee of the Ad Hoc Creditor Committee of International Bondholders and their advisors, Rothschild & Co and Orrick, Herrington & Sutcliffe LLP, as well as the Steering Committee of the Creditor Committee of Regional Bondholders and their advisors, Renaissance Capital Africa, for their productive and consistent engagement throughout the process.

"We thank our advisors Lazard Frères and Hogan Lovells, acting respectively as financial and legal advisors, and Algest, acting as a strategic advisor, for supporting the Republic of Ghana during this debt restructuring," the statement concluded.

SA/MA

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