A Ghanaian government plan to reorganize its domestic debt received acceptance from more than 80% of bondholders, a key step in the country’s efforts to secure a $3 billion bailout from the International Monetary Fund.
(Bloomberg) — A Ghanaian government plan to reorganize its domestic debt received acceptance from more than 80% of bondholders, a key step in the country’s efforts to secure a $3 billion bailout from the International Monetary Fund.
The West African nation is restructuring 137.3 billion cedis ($11.3 billion) of domestic loans as part of an overhaul of almost all of its 575.5 billion cedis of debt. The authorities had targeted an 80% subscription rate for the domestic-debt restructuring to be deemed successful and the offer deadline was postponed five times to improve participation.
The government is “grateful for the overwhelming participation of all bondholders,” the Finance Ministry said in a statement on Tuesday. “Your support and contributions have gotten your country much closer to securing the IMF programme.”
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, which held about 5.5% of all domestic government bonds as of August, were exempted from the main offer after labor unions threatened to go on strike to preserve their members’ savings.
Read: Ghana Plans to Offer Delayed Bond Payments to Lure Pension Funds
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 is targeting reducing its liabilities from an estimated 105% of gross domestic product in 2022 to 55% by 2028
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