The Government of Ghana is set to roll out the much-anticipated Eurobond Debt Exchange Programme next week, according to sources familiar with the Finance Ministry’s plans.
The programme, which aims to restructure approximately $13 billion in Eurobond debt, is expected to run over a 10-day period.
The Eurobond Debt Exchange Programme will invite investors to swap their existing bonds for new instruments under revised terms, as part of the government’s broader strategy to address its external debt challenges.
This follows an agreement in principle reached in June 2024 between the government and Eurobond holders, with the prospectus now ready for release.
As part of the June agreement, Eurobond holders are expected to forgo about $4.7 billion owed by the Ghanaian government. This is a significant portion of the $13.1 billion in debt that the government is looking to restructure under the new plan.
The term sheet for the deal also indicates that bondholders will contribute a cash flow of $4.4 billion during the period of the ongoing International Monetary Fund (IMF) programme, providing much-needed liquidity as Ghana navigates its fiscal challenges.
Two options are being proposed to bondholders under the programme. The “P.A.R.” option, which will cap participation at 1.6 billion cedis, offers investors an alternative approach to the traditional bond structure. The second option, known as the “Disco” option, will see bondholders receiving three new instruments as part of the restructuring.
Furthermore, investors have agreed to a 37% haircut on both interest and principal maturity, a crucial concession that will be incorporated into the offer.
The government is also introducing a Non-Financial Term, dubbed the “most favoured creditor clause,” aimed at ensuring that no other creditors receive better net present value terms than those offered in the Eurobond exchange.
The International Monetary Fund (IMF) has given its approval to the deal, noting that the proposed terms are aligned with Ghana’s ongoing Debt Sustainability Programme. In a recent staff report, the IMF emphasized the importance of finalizing external debt restructuring before the country’s upcoming December elections.
Meanwhile, Ghana is continuing efforts to secure agreements with bilateral commercial creditors as part of a broader plan to restructure its total external debts. The government is seeking a comprehensive solution to stabilize its finances and return to a path of sustainable economic growth.
World Bank Country Director for Ghana, Robert Taliercio O’Brien, expressed optimism during an interview with Joy Business, suggesting that a timely agreement with external creditors will play a critical role in Ghana’s economic recovery efforts. He stated, “A swift resolution will help the country bounce back from its fiscal challenges and lay the foundation for a stronger recovery.”
With the Eurobond Debt Exchange Programme slated for launch next week, attention will be focused on the reception from bondholders and the potential impact on Ghana’s economic trajectory. The 10-day window for the debt exchange is seen as a vital step in Ghana’s efforts to regain financial stability amid an ongoing fiscal crisis.
The outcome of the exchange will likely shape investor confidence and determine the success of Ghana’s broader debt restructuring strategy in the months to come.