Ghana nears agreement with bondholders on Eurobonds restructuring
The Government of Ghana has announced significant progress in negotiations with international and regional bondholders, reaching an Agreement in Principle (AIP) concerning the restructuring of the Republic’s Eurobonds.
The agreement involves substantial concessions from bondholders aimed at providing essential debt relief to Ghana amid economic challenges.
Bondholder Participation
The International Steering Committee and the Regional Steering Committee, representing a combined ownership of approximately 55% of Ghana’s outstanding Eurobonds, have agreed to the AIP.
Financial Terms
Bondholders are set to forego around $4.7 billion of claims and provide cash flow relief totaling approximately $4.4 billion during the IMF program period. These concessions are critical to restoring Ghana’s debt sustainability.
Non-Financial Terms
The AIP includes provisions such as a most-favored creditor clause to ensure parity among creditors, requirements for semi-annual public debt reporting by Ghana, and measures for loss reinstatement and liquidated damages in case of legal challenges.
The agreement is seen as a positive step towards achieving debt sustainability as evaluated under the Joint IMF/World Bank LIC Debt Sustainability Framework (DSF).
The next steps involve launching a consent solicitation process and finalizing definitive documentation, subject to approval from the broader bondholder community. The Government anticipates moving forward with these steps in the coming weeks, pending necessary approvals.
This development follows consultations with the International Monetary Fund (IMF) and the Official Creditor Committee for Ghana, both of which have expressed support pending official confirmation at the next IMF Board Meeting.
The restructuring agreement underscores Ghana’s commitment to managing its debt responsibly and ensuring financial stability amidst challenging global economic conditions.
