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HomeLocal NewsDebt Exchange Programme: Ghana Euro Bondholders form representative committee

Debt Exchange Programme: Ghana Euro Bondholders form representative committee

A group called Ghana Euro Bondholders has set up a a bondholder creditor committee to seek its interest in discussions with government in respect of the debt exchange programme.

This follows government of Ghana’s declaration of its intention to seek a restructuring of its external debt.

The group which described itself as international holders of Ghana’s Eurobonds say the Committee is representative of a diverse group of institutional investors, including mutual funds, asset managers, insurance firms, hedge funds, and family offices.

Steering Members of the Committee include: Abrdn, Amundi (UK) Limited, BlackRock, Greylock Capital Management, Ninety One.

A press release dated December 19 stated that “The Committee is focused on the orderly and comprehensive resolution of Ghana’s debt challenges, recognizing that such resolution will require fair burden-sharing and collaboration among the Ghanaian authorities, private creditors (both domestic and international) and official sector creditors.”

The Committee welcomed ongoing engagement with the International Monetary Fund (IMF) and the recent announcement of the Staff Level Agreement.

“The Committee notes that a process of good faith negotiation would avoid unilateral actions and would require, inter alia, the timely exchange of detailed economic and financial information among the committee, the Ghanaian authorities and the IMF, and would need to be anchored in reasonably feasible economic adjustment by the Ghanaian authorities,” the statement noted.

In this regard, the Committee endorsed the Institute of International Finance’s Principles for Stable Capital Flows and Fair Debt Restructuring, which provide meaningful guidance for successful sovereign debt restructurings.

The statement added that, “The Committee stands ready for a swift engagement on that basis. The Committee aims at securing an outcome that is both equitable to creditors and responsive to the economic and social challenges facing Ghana. A key factor in measuring the success of Ghana’s debt resolution would be the timely restoration of international market access, which remains critical for Ghana to meet its development objectives.

The statement announced that, “The Committee has appointed Orrick, Herrington & Sutcliffe LLP as legal advisor and Rothschild & Co as financial advisor. Holders of the Eurobonds interested in receiving more information are encouraged to contact ghana.bondholders@rothschildandco.com or tlaryea@orrick.com (+ 1 (202) 255 8902).”

It would be recalled that government on December 5, 2022, announced a debt restructuring measure.

According to Ken Ofori-Atta, the objective is “to invite holders of domestic debt to voluntarily exchange approximately GH¢137 billion of the domestic notes and bonds of the Republic, including E.S.L.A. and Daakye bonds, for a package of New Bonds to be issued by the Republic.”

Bondholders like pension funds, banks and insurance firms will have to exchange their bonds for one that will earn zero interest next year.

The new bonds will only begin to earn five per cent interest in 2024 and 10 per cent for the remainder of their tenure. The maturity dates have also been extended with the first bonds only maturing in 2027.

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Abdullah Anaman
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