Ghana’s bondholders, including major creditors like BlackRock Inc. and Abrdn Plc, have supported the government’s $13 billion eurobond exchange offer, marking a significant step in the country’s broader $20 billion debt restructuring effort.
The creditor committee confirmed that the legal and financial terms of the exchange align with the agreement reached in June. Investors have until September 30 to swap their debt, choosing between two options: the DISCO, which imposes a 37% haircut with interest starting at 5% and increasing to 6%, or the PAR option, which offers no nominal losses but provides 1.5% interest on bonds maturing in 2037.
Ghana’s move to halt most external debt payments in December 2022 caught investors off guard, with the nation’s public debt standing at approximately $36.7 billion. In May 2023, Ghana secured a $3 billion bailout from the IMF, tied to reducing its public debt to 55% of GDP by 2028. Restructuring eurobonds is one of the final steps in Ghana’s debt overhaul, following a domestic debt swap and an agreement to rework $5 billion in loans with bilateral creditors.
This restructuring, part of the G20’s Common Framework for debt treatment, ensures that both sovereign lenders and private creditors, like eurobond holders, receive comparable terms. Meanwhile, Ghana has extended debt-restructuring offers to private banks and contractors, aiming to address its $2.8 billion debt owed to them. Alongside these efforts, Ghana continues to grapple with high inflation and increased taxes, raising concerns about economic stability ahead of the upcoming presidential elections.
The bondholders stressed the importance of sustained economic reforms and fiscal responsibility to help Ghana regain international market access and meet its development goals.
