Ghana reaches agreement in principle with bondholders to restructure $13 billion debt – Report

The government of Ghana has reached an agreement in principle with its bondholders for the restructuring of $13 billion of Eurobonds, as reported by Reuters.

The sources familiar with the development stated that the deal will involve international bondholders taking a 37 percent principal haircut, with the maturity of the bonds extended.

After suspending debt payments in 2022, Ghana has now defaulted on approximately $30 billion of its external debt.

Following a similar approach to Zambia’s debt deal with international bondholders, Ghana has also opted for debt treatment under the G20 Common Framework, which is expected to expedite debt restructurings.

One source quoted by Reuters said, "For Ghana, things are pretty close. We can expect an announcement by next week," while requesting anonymity due to not being authorized to speak to the media.

However, two other sources familiar with the deal suggested that a formal announcement will likely be made on Friday, June 21, 2024.

Since March 2024, Ghana has been engaged in formal negotiations with two groups of international bondholders for a debt restructuring, but the talks failed to reach an agreement as they did not meet the International Monetary Fund’s (IMF) debt sustainability analysis requirements.

Ghana then presented a revised deal to its international bondholders, resulting in them reaching an agreement in principle.

The country is also anticipating approval from the IMF Executive Board for the third tranche disbursement of bailout funds, totalling $360 million under the three-year IMF Extended Credit Facility program.

The IMF Board is scheduled to convene on June 28, 2024, to address this matter.

MA/AE

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