Government extends deadline of Domestic Debt Exchange Programme to January 16

The Government Saturday announced the extension of the expiration date of the invitation date for the Voluntary Domestic Debt Exchange to Monday, January 2023 (at 1600 hours).

The Settlement Date for the Invitation is now expected to occur on Tuesday, January 24, 2023, “or as soon as practicable thereafter, but no later than the Longstop Date which is now scheduled for Tuesday, January 31 2023, unless further extended by the Government pursuant to the Invitation,” a press release from the Finance Ministry stated.

“The Announcement Date is now expected to occur on or about 17th January 2023″.

The previous deadline for the invitation was set for Friday, December 30, following the extension of the original deadline of Monday, December 19.

A press release on the development, issued by the Public Relations Unit of the Finance Ministry, also announced some modifications by the government on the invitation to the Exchange.

They are as follows:

i. Offering accrued and unpaid interest on Eligible Bonds, and a cash tender fee payment to holders of Eligible Bonds maturing in 2023;

ii. Increasing the New Bonds offered by adding eight new instruments to the composition of the New Bonds, for a total of 12 New Bonds, one maturing each year starting January 2027 and ending January 2038;

iii. Modifying the Exchange Consideration Ratios for each New Bond. The Exchange Consideration Ratio applicable to Eligible Bonds maturing in 2023 will be different than for other Eligible Bonds;

iv. Setting a non-binding target minimum level of overall participation of 80% of the aggregate principal amount outstanding of Eligible Bonds; and

v. Expanding the type of investors that can participate in the Exchange to now include Individual Investors.

The release said these modifications would be set forth fully in an Amended and Restated Exchange Memorandum which is expected to be published during the week of 26th December 2022.

It explained: “Conforming changes (including adding and modifying defined terms) in respect of the above amendments and modifications to cure ambiguity, omission, defect, error or inconsistency may be included in the Amended and Restated Exchange Memorandum.

“As set forth in the Exchange Memorandum, the Government reserves the right in its sole discretion to extend the timetable for the Invitation at any time and to make amendments to the Invitation at any time.”

The Government urged eligible holders, whose eligible bonds were held on their behalf by a broker, dealer, bank, custodian, trust company or other nominee to contact such entity they wished to participate in the Invitation, as such entities may establish an earlier deadline to receive instructions to tender eligible bonds.

“In making this decision to extend and the modifications described herein, the Government considered feedback from the financial sector in relation to the need to secure internal approvals,” the release said.”

“Further, this extension affords the Government of Ghana the opportunity to consider suggestions made by all stakeholders with the aim of adjusting certain measures acceptable within the constraints of the Government’s Debt Sustainability Analysis.”

As part of its efforts to address the country’s ongoing economic crisis, the Government on Monday, December 5, launched a domestic exchange programme of approximately GHS137.3 billion of principal amount outstanding of certain of its domestic notes and bonds issued by the Government, E.S.L.A. Plc or Daakye Trust Plc.

It invited non individual eligible domestic bondholders to exchange them for a package of new bonds to be issued by the Government.

This will facilitate and support its move for economic restoration, stability and growth following the COVID-19 pandemic, high crude oil prices and other external factors.

The Government has reached a Staff Level Agreement with the International Monetary Fund for a three billion dollar bailout package.