Ghana to start Eurobond exchange next week to wrap up debt restructuring

Ghana will kick off a debt exchange program next week to wrap up its dollar bonds revamp.

The process inviting investors to swap their existing securities for new ones will last 10 working days, Minister of State at the Ministry of Finance Abena Osei Asare said in an interview Thursday.

Ghana’s eurobonds maturing in 2032 rose 0.2 cent to 51.64 cents on the dollar at 4:30 p.m. in London. Notes due 2035 gained 0.1 cent to 51.62 cents on the dollar.

Ghana reached an agreement in principle with eurobond holders in June to rework $13 billion of eurobonds. The deal presents investors with the choice between two alternatives: a so-called DISCO option or a PAR option.

Investors who accept the former option will take a 37% hair cut and receive two new bonds maturing in July 2029 and 2035 carrying interest rates of 5% from this year through July 2028 and stepped up to 6% thereafter. Bondholders who opt for the latter will get a 1.5% interest rate on new bonds maturing in January 2037 without any haircuts.

Ghana embarked on a reorganization of almost all of its debt in December 2022 as part of conditionalities to qualify for a $3 billion International Monetary Fund program.

The country completed a domestic debt exchange last year and reached a pact also in June with bilateral lenders to rework $5.1 billion of loans.

The West African nation’s deal has been hailed as one of the quickest under the Group of 20’s Common Framework, which works with the principle of comparability of treatment between sovereign lenders and bond investors. It took Zambia nearly four years to issue two series of restructured notes to investors.

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