The government has demonstrated commitment and ability toward restoring investor confidence in both domestic and international markets, following the payment of the first coupon obligation on new bonds resulting from a recent debt restructuring.
The success of the first debt restructuring has laid the groundwork for the second phase of the domestic debt exchange programme, including the GH¢31billion alternative offer and the US$809million dollar-denominated domestic notes and bonds. These efforts aim to spur investor trust and bring stability back to the financial landscape.
Finance Minister Ken Ofori-Atta, in a post yesterday on his official X (formerly Twitter) platform, stressed the administration’s dedication to upholding the domestic debt operations.
“In line with the government’s commitment to the continued success and credibility of Ghana’s domestic debt operations, instructions have gone out for the settlement of the about GH¢2.4billion first coupon payment of the DDEP, due today,” the post read.
Of the coupon payment, a significant portion – GH¢5.37million – was allocated to individual bondholders.
Mr. Ofori-Atta emphasised the pivotal role of the new bonds in revitalising the domestic bond market, stating: “New bonds now stand as the dominant instruments in our domestic bond market, laying the basis for rapid recovery. We remain committed to the success of the new bonds; and again, thank all those who participated in the DDEP for their sacrifices”.
Fitch Ratings echoed this sentiment, highlighting that the coupon payments signal positive advancements in Ghana’s credit rating. This move is expected to positively impact the ongoing external debt negotiations with international investors and boost market confidence.
In a move that further reflects the government’s commitment to inclusivity and market stability, an administrative window has been announced for additional bondholders to participate in the second phase of the debt exchange, for both the alternative offer and the USD-denominated local bonds. This extension provides an opportunity for eligible holders to tender their eligible bonds, thereby expanding the pool of participants.
The revised schedule for the invitation to exchange encompasses crucial dates – the expiration date is set for Friday, August 25, 2023 at 4:00 p.m. (GMT); the announcement date is anticipated to be around Monday, August 28, 2023; the settlement date is projected for Friday, September 1, 2023 or as promptly as feasible thereafter; and the longstop date is established as Monday, September 4, 2023, unless subject to further extension by the government.
The government’s decision to extend the invitation is a response to the substantial majority of eligible holders who have already tendered their bonds, reflecting the eagerness among stakeholders to participate in the debt exchange. As of Friday, August 18, 2023, eligible holders with a substantial majority of all USD-denominated local eligible bonds amounting to approximately 91 percent had tendered their eligible bonds.
The coupon payment is seen as a testament to the government’s commitment to ensuring a stable and thriving financial market.