A Bloomberg report has it that, holders of Eurobonds are expected to face a potential reduction in the principal amount of their debt, with estimates ranging from 30 to 40 percent in the upcoming external debt restructuring program.
This development follows Ghana’s decision to suspend Eurobond debt payments in December 2022, driven by a series of economic challenges that led the country to seek an IMF bailout package.
During an investor meeting in London on October 16, 2023, the Minister of Finance, Ken Ofori-Atta, disclosed that two creditor groups, one regional and one international, had submitted their respective debt restructuring proposals to the government.
“In our indicative scenario, the restructuring terms for bondholders involve a nominal haircut between 30% and 40%, looking at coupons of no more than 5% and final maturities of no more than maybe 20 years,” Ken Ofori-Atta is quoted by Bloomberg.
“We expect to accelerate a constructive dialogue in the coming weeks,” he added.
The administration hopes to strike a deal with external creditors by the end of this year, according to Ken Ofori-Atta, who was speaking on October 6, 2023 during a joint press conference with the IMF, BoG, and the Finance Ministry.
With plans to continue working with bilateral creditors on an external debt restructuring program, Ghana hopes to secure the second tranche of the $600 million package in November of this year.
For its part, the Ministry of Finance has urged its bilateral creditors to quickly reach a settlement in order to give Ghana access to the $3 billion Extended Credit Facility’s second bailout package.