Ghana extends restructuring exchange offer for domestic debt

Chicago, Dec. 29 – Ghana announced two extensions to its exchange offer to restructure its domestic debt, according to multiple notices on the finance ministry website.

On Dec. 16 and Dec. 20, the sovereign issuer announced an extension to Dec. 30 and then on Wednesday extended the expiration date to 11 a.m. ET on Jan. 16.

Results are expected to be announced on Jan. 17.

Settlement is now expected to occur on Jan. 24. The longstop date is Jan. 31.

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 12 new bonds (increased from four new bonds), with bonds maturing each year starting January 2027 and ending January 2038.

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

From the original offer, 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.

Further modifications to the offer, in addition to eight new bonds in the exchange offer, include offering accrued and unpaid interest on eligible bonds and a cash tender fee payment to holders of bonds maturing in 2023.

The exchange consideration ratio applicable to eligible bonds maturing in 2023 will be different than for other eligible bonds.

A non-binding target minimum level of overall participation of 80% of the aggregate principal amount of outstanding eligible bonds has been set.

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

As an additional modification, individual investors may now participate in the offer.

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

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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