Ghana has reached a preliminary agreement with its bondholders to restructure $13 billion of international debt, according to three sources briefed by Reuters on Thursday, June 20.
This agreement follows a recent deal with official creditors.
Under the terms of the deal, bondholders will accept a haircut on principal of up to 37% and extend the maturity of the bonds, as reported by two of the sources.
In 2022, Ghana defaulted on most of its $30 billion external debt due to the COVID-19 pandemic, the Ukraine conflict, higher global interest rates, and escalating debt levels.
Similar to Zambia, Ghana opted for debt restructuring under the G20 Common Framework, which includes China as a major bilateral lender.
For Ghana, “things are pretty close. We can expect an announcement by next week,” said one of the sources, who requested anonymity due to media constraints.
The other two sources suggested that the announcement could come as early as Friday.
At the time of reporting, Ghana’s finance ministry and the Paris Club, an association of creditor nations, were not available for immediate comment.
Formal negotiations commenced in mid-March with two groups of bondholders, comprising Western asset managers, hedge funds, and regional African banks. Discussions hit a snag in April when the proposed terms did not align with the IMF’s criteria for debt sustainability, prompting a reassessment.
According to the sources, the revised IMF debt framework for Ghana, shared with bondholders earlier, facilitated the recent preliminary agreement.
Earlier this month, Ghana finalized an agreement with its official creditors committee, paving the way for an IMF executive board meeting on June 28. The meeting will review Ghana’s $3 billion, three-year loan package, including the potential disbursement of a $360 million tranche.