On February 27, Ghana’s finance ministry announced the implementation of measures to enable the resumption of payments for coupons and principals of past bonds on March 13 after completing their domestic debt exchange program.
Fitch recently downgraded Ghana’s foreign-currency issuer default rating to restricted default, as the country failed to make the coupon payment on its $1 billion 2026 Eurobond. This downgrade was before the latest announcement regarding the resumption of payments for past bonds.
“The newly issued bonds have been settled and listed and will become the new benchmark bonds for the fixed-income market. The Ministry of Finance will work with relevant stakeholders, as agreed, to ensure that these new benchmark securities become the basis for deepening the domestic sovereign bond market,” the Ghanaian finance ministry stated.
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S&P Global Ratings upgraded Ghana’s local currency sovereign credit ratings from selective default (SD) to ‘CCC+/C.’ According to the Finance Ministry, it is a recognition of the achievement of completing the DDEP.
“on Friday, February 24, 2023, S&P Global Ratings raised Ghana’s local currency sovereign credit ratings from selective default (SD) to ‘CCC+/C.’ This acknowledges the completion of the DDEP with a successful delivery of new securities to bondholders. In doing so, the selective default is substantially cured.” the statement noted.
Ghana had to restructure its debt as part of the conditions for obtaining a $3 billion bailout from the International Monetary Fund. And on February 14, the country closed its long-delayed domestic debt exchange program. The program received registrations from approximately 85% of bondholders eligible to participate.
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A coalition of individual bondholder groups, including the Pensioner Bondholders Forum, the Individual Bondholders Association of Ghana, and the Individual Bondholders Forum, had urged the Finance Ministry to demand payment for matured bonds not tendered as part of the DDEP.
On February 16, Ken Ofori-Atta announced that significant talks with external bondholders would commence in the upcoming weeks.
“The above-stated milestone is further expected to accelerate the engagement with our external creditors. The Government of Ghana also takes this opportunity to assure our external creditors of their equal importance to the Republic of Ghana. We will, therefore, continue to work together to advance the progress of our external debt treatment, in order to ensure Ghana’s long-term macroeconomic stability,” Ofori-Atta noted in his statement.
