Agreement with Eurobond holders confirmed by OCC

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The Ministry of Finance has announced the successful alignment of an agreement in principle with Eurobond holders, confirmed by its Official Creditor Committee (OCC).

This agreement, consistent with the comparability of treatment principle, marks a crucial milestone in the country’s debt restructuring efforts, the ministry said in a communique.

The ministry revealed that the OCC had formally confirmed the agreement, which ensures that all external creditors are treated equally.

This, it added, is a pivotal element of the OCC Common Framework for Debt Restructuring that mandates comparable treatment for all creditors involved in the restructuring process.

“The confirmation from our Official Creditor Committee reaffirms our commitment to fair and equitable treatment of all creditors,” a portion of the statement read.

“This is a critical step in ensuring the integrity of our debt restructuring efforts and securing long-term financial stability for Ghana,” it added.

The principle of comparability is designed to maintain equity among creditors, thereby fostering widespread cooperation and confidence.

As part of this initiative, government is set to continue proactive engagement with the steering committees. The goal is to finalise necessary documentation and swiftly proceed with the consent solicitation process.

This comes after the nation successfully reached an agreement in principle with private creditors, about two weeks ago, to restructure around US$13billion of its external debt.

According to terms of the agreement, investors have agreed to accept nominal losses of 37 percent on their holdings. A statement issued by advisers to the international creditor committee and government revealed that bondholders will relinquish US$4.7billion of their claims, while also providing cash flow relief amounting to about US$4.4billion during the International Monetary Fund (IMF) programme period.

This marks a significant step in the ongoing debt treatment process. Unsurprisingly, the largest hurdle has been interactions with external creditors since payments on external loans were unilaterally halted in December 2022.

This development, as well as successful completion of the second review under the IMF programme, has helped unlock disbursement of SDR (Special Drawing Rights) 269.1 million – about                     US$360million.

The nation is restructuring nearly all of its US$43billion debt under the Group of 20’s Common Framework.

The country completed a domestic debt exchange last year and recently reached a memorandum of understanding with its official creditors, led by France and China, to restructure US$5.1billion.

The G-20 framework expands the Paris Club of sovereign lenders to include China and other countries.

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