Ghana starts restructuring exchange offer for domestic debt

Chicago, Dec. 6 – Ghana launched an exchange offer to restructure its domestic debt on Monday, according to a notice.

The approximate GHS 137.3 billion of notes that are part of the invitation were issued by Ghana, E.S.L.A. plc and Daakye Trust plc.

The consideration will be four new bonds, with each amount of existing bonds tendered with a ratio of a new 2027 bond (17%), a new 2029 bond (17%), a new 2032 bond (25%) and a new 2037 bond (41%).

The principal on all of the notes will be paid in equal installments. The 2027 bonds will be repaid on Dec. 23, 2026 and Dec. 23, 2027. The 2029 bonds will be repaid on Dec. 23, 2028 and Dec. 23, 2029. The 2032 bonds will be repaid on Dec. 23, 2030, Dec. 23, 2031 and Dec. 23, 2032. The new 2037 bonds will be repaid on Dec. 23, 2033, Dec. 23, 2034, Dec. 23, 2035, Dec. 23, 2036 and Dec. 23, 2037.

All of the new bonds will list the republic as issuer.

The exchange bonds will have a lower average coupon and an extended average maturity from the current bonds. There will be no reduction in the principal amount.

All of the new bonds will be 0% coupon initially, stepping up to 5% in 2024 and 10% from 2025 onwards.

Tendering bondholders must tender all of the eligible bonds they own.

A full list of the domestic bonds can be found on the ministry website (https://mofep.gov.gh/).

The offer will expire at 11 a.m. ET on Dec. 19.

Settlement is planned for Dec. 23.

Lazard Freres is the financial adviser for Ghana.

Morrow Sodali is acting as the information and coordination agent (https://projects.morrowsodali.com/ghanadde).

More information can also be had by contacting the CSD Contact Centre (+233302755200, dde@csd.com.gh, www.csd.com.gh/dde).

In a letter, the ministry of finance said that, “The government expects overwhelming support for the exchange. The alternative would be a far worse economic crisis, with protracted closure from international markets (including imported goods and services) and further domestic instability both for the real economy and the financial sector. It would also mean depleted fiscal resources to support the vulnerable.”

In the letter, it also stated that “External debt restructuring parameters will be negotiated in due course.”

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