Debt restructuring: Eurobond holders form committee

Holders of Ghana’s Eurobonds have formed a bondholder creditor committee following an announcement by the government of its intention to seek a restructuring of its external debt.

The committee is a representative of a diverse group of institutional investors including mutual funds, asset managers, insurance firms, hedge funds, and family offices.

The steering members of the committee include Abrdn, Amundi (UK) Limited, BlackRock, Greylock Capital Management and Ninety One.

The committee in a statement said it is focused on the orderly and comprehensive resolution of Ghana’s debt challenges recognising that such resolution will require fair burden-sharing and collaboration among the Ghanaian authorities, private creditors, both domestic and international, and official sector creditors.

The committee said it welcomes the government’s ongoing engagements with the International Monetary Fund and the recent announcement of the Staff Level Agreement.

The committee noted that a process of good faith negotiation would avoid unilateral actions and would require, inter alia, the timely exchange of detailed economic and financial information among the committee, the Ghanaian authorities and the IMF, and would need to be anchored in reasonably feasible economic adjustment by the Ghanaian authorities.

In this regard, the committee has endorsed the Institute of Intentional Finance’s Principles for Stable Capital Flow and Fair Debt Restructuring, which provides meaningful guidance for successful sovereign debt restructurings.

The committee said it stands ready for a swift engagement on that basis.

It added that it aims at securing an outcome that is both equitable to creditors and responsive to the economic and social challenges facing Ghana.

According to the Eurobond holders, a key factor in measuring the success of Ghana’s debt resolution would be the timely restoration of international market access, which remains critical for Ghana to meet its development objectives.

The committee has appointed Orrick, Herrington & Sutcliffe LLP as legal advisor and Rothschild & Co as financial advisor.