Government Includes Individual Bond Holders In Debt Exchange Programme

The amended GH¢137.3 billion domestic bond exchange programme now include individuals, as part of efforts by the government to restructure debts.

This is to help secure an approval from the management and executive board of the International Monetary Fund (IMF) for a US$3 billion loan-support programme, to address Ghana’s current economic crisis.

When the exchange programme was launched earlier in December 2022, individuals were not included, but after the government agreed to demands from organised labour to exclude pension funds, the government amended the programme to include individual investments.

Read also: Domestic Debt programme terms amended, expiration deadline extended further to Jan 16

A press statement dated December 24, 2022, issued by the Ministry of Finance noted that in addition to foregoing extensions the government was “expanding the type of investors that can participate in the Exchange to now include Individual Investors.”

Other modifications to the debt exchange programme included the setting of a non-binding target minimum level of overall participation of 80 per cent of aggregate principal amount outstanding of eligible bonds. 

The Ministry also said: “Offering accrued and unpaid interest on Eligible Bonds, and a cash tender fee payment to holders of Eligible Bonds maturing in 2023.” 

There would also be eight new instruments to the composition of the new bonds, for a total of 12 new bonds, one maturing each year starting January 2027 and ending January 2038. 

However, the Ministry said the modifications would be set forth fully in an Amended and Restated Exchange Memorandum, expected to be published in the week of December 26, 2022.

 “Conforming changes (including adding and modifying defined terms) in respect of the above amendments and modifications to cure ambiguity, omission, defect, error or inconsistency may be included in the Amended and Restated Exchange Memorandum,” the Ministry added.

The government has further extended the deadline for the voluntary participation in the debt exchange programme to January 16, 2023 from the previous December 30, 2022.