Ghana fails to reach deal on US$13bn international bonds restructuring
JOHANNESBURG. — Ghana has failed to strike a deal with two bondholder groups to restructure US$13 billion of international bonds, the government said yesterday, dealing a blow to its efforts to swiftly emerge from default and economic crisis.
Talks were derailed for now amid indications from the International Monetary Fund (IMF) that the deal would not fit its debt sustainability parameters, which set out how much debt it thinks a country can afford, the government said in a statement.
Ghana had been in formal talks with two groups holding its international bonds since March 16 — one “international” group of western asset managers and hedge funds and another one including regional African banks.
The regional African bondholder group had also rejected part of the proposed rework, including a “PAR option” to retain the original value of the bonds with a longer maturity and lower coupon.
In December 2022, Ghana, the world’s second-biggest cocoa producer, defaulted on most of its external debt of US$30 billion, after debt costs and inflation surged when it was locked out of international markets.
“The Government is actively working on solutions that it believes would be consistent with IMF programme parameters under the set of policies currently being discussed, with the objective of reaching a mutual agreement acceptable to all parties,” the government said in the regulatory statement.
The dollar-denominated bonds, known as Eurobonds, fell around 1 cent, with most of the maturities trading near the 50 cents in the dollar mark, according to Tradeweb data.
Ghana, together with Zambia and Ethiopia — is reworking debt under the G20 Common Framework, a process set up during the Covid-19 pandemic to speed up debt overhauls.
However, progress has been slow. Zambia struggled to get its bond restructuring deal over the line amid objections from official creditors, though it eventually reached agreement in principle in late March.
Ghana is “confident… at some point” it will reach an agreement with bondholders, Finance Minister Mohammed Amin Adam told a press conference on Saturday, without giving a timeline.
The IMF’s Ghana mission chief Stephane Roudet told the joint news briefing, held to coincide with the end of the IMF’s second review of its US$3 billion loan programme with Ghana, that the fund needed to continue to see progress in talks with bondholders. — CNBC Africa.