Eurobond holders are anticipated to waive approximately $4.7 billion owed to them by the government.
This forms part of the agreement reached with the bondholders to restructure a $13.1 billion debt.
The term sheet outlining the Eurobond deal reveals that the bondholders will also contribute a cash flow of $4.4 billion during the period covered by the International Monetary Fund (IMF) program.
These concessions are deemed necessary under the new deal to restore debt sustainability within the framework of the Fund’s program.
The government is also proposing two options as part of the deal: the P.A.R and Disco Option. According to the agreement, investors opting for the Disco option will receive three new bond instruments.
However, the P.A.R option will have a maximum cap of 1.6 billion cedis.
Furthermore, the agreement will ensure that the government enters into a Non-Financial Terms clause, described as a most favored creditor clause, which will guarantee that other creditors do not receive more favorable net present value terms.
Bondholders have also agreed to a 37 percent reduction in their interest and maturity obligations.
Ghana is also mandated to publish certain public debt information semi-annually. Measures have been taken to prevent the courts from invalidating this deal.
The formal launch of the Eurobond deal is expected to take place in the coming weeks, contingent upon agreement on the definitive documentation.
The government will seek the necessary approvals and support from the broader bondholder community to successfully finalize this significant transaction.
The IMF has also given its approval to this deal, allowing the government to proceed with signing the agreement with the creditors once they accept the terms.
This agreement comes at a time when the IMF board is scheduled to convene on Ghana this Friday for the country’s second review under the fund program.
The government also believes that this deal will play a significant role in stabilizing the Ghana cedi.