Ghana bondholders swapped 83 billion cedis of debt ($6.8 billion) in the first step of a domestic debt restructuring that closed last week.
(Bloomberg) — Ghana bondholders swapped 83 billion cedis of debt ($6.8 billion) in the first step of a domestic debt restructuring that closed last week.
The total is 85% out of the 98 billion cedis of debt eligible to be exchanged, the Finance Ministry said in a statement Tuesday.
“The government is pleased with the results, as a substantial majority of the eligible holders have tendered,” according to the statement.
Still, Ghana has a long way to go before reaching its debt restructuring goals and this first part of the deal accounts for only about 60% of what the country has said it wants to achieve. The settlement date for the new bonds was extended by a week to Feb. 21.
The cedi, which gained as much at 3.1% to the dollar earlier Tuesday pared the rally to trade 0.5% stronger at 12.1934 per dollar at 5.34 p.m. in the capital, Accra.
In December, authorities said they were looking to restructure 137.3 billion cedis of domestic loans as part of an overhaul of almost all of its 575.5 billion cedis of debt. They targeted an 80% subscription rate for the domestic-debt restructuring to be deemed successful and postponed the deadline five times to improve participation.
The government is engaging in separate talks with pension funds, which could further boost the number of institutions taking part in the process. Pension funds were exempted from the main offer after labor unions threatened to go on strike to preserve their members’ savings.
Bloomberg reported last week that the government planned to present pension funds with a new offer, effectively constituting a second part of the local debt restructuring.
Besides the reorganization of domestic loans, the government is also in talks to restructure bilateral and other external debt after suspending interest payments on $13 billion of eurobonds. The West African nation has said it wants to reduce liabilities from an estimated 105% of gross domestic product in 2022 to 55% by 2028.
(Adds cedi reaction in fifth paragraph)
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