Ghana

Ghana reached an agreement in principle with private creditors to restructure about $13 billion of debt, a key milestone in the West African country’s efforts to overhaul its loans. The nation’s bonds rallied, Bloomberg News reported. Under terms of an accord announced on Monday, investors accepted nominal losses of 37% on their holdings, according to a statement issued by the advisers to an international creditor committee and the government..

Ghana and its bondholders will restart talks next week to hash out a debt restructuring deal on $13 billion of international bonds, four sources told Reuters, on the heels of a deal finalised with official creditors earlier this week, Reuters reported. Ghana, a gold and cocoa producer, defaulted on most of its $30 billion in external debt in 2022, weighed by the COVID-19 pandemic, the war in Ukraine and rapid global interest rate hikes that boosted borrowing costs.

Ghana reached a deal with creditors formalizing debt treatment plans agreed in January, opening the the way for the disbursement of aid from the International Monetary Fund, the finance ministry said Wednesday, Bloomberg News reported. “The financial terms of the agreement remain unchanged,” the ministry said in a statement.

Ghana has started a market for trading short-term debt, a platform that builds on the fixed income market created more than eight years ago, and comes as the country restructures debt to make it sustainable under an International Monetary Fund program, Bloomberg News reported. The market for selling and buying of commercial paper provides the avenue for companies and organizations seeking to issue debt within the shortest possible time frame to do so and for investors to find enhanced credit worthiness, Managing Director of the Ghana Stock Exchange Abena Amoah, said in the capital, Accra.

Ghana and creditors expect to reach an agreement in principle to restructure overseas bonds as soon as the end of May, Bloomberg News reported. A committee of bondholders and representatives for the government are waiting for the International Monetary Fund to approve an updated economic review, which is likely to allow a deal to move forward, said the people, who requested anonymity because the talks are private. The two sides are trying to rework about $13 billion of Eurobonds, one of the final steps in the nation’s restructuring process.

Ghana has made “significant progress” in debt-restructuring negotiations and the latest snag that sent its eurobonds tumbling on Monday will be ironed out in further talks with bondholders, Finance Minister Mohammed Amin Adam said, Bloomberg News reported. Negotiations that started mid-March resulted in an interim deal last week with international investors holding about 40% of Ghana’s $13 billion of defaulted eurobonds.

Ghanaian authorities and international bondholders expect to begin talks this week aimed at a deal to restructure roughly $13 billion of defaulted global debt, Bloomberg News reported. A group representing the private investors and government officials plan to hold meetings to kick off negotiations over the coming days. Creditors entered into non-disclosure agreements with the government this week, signaling a first step in the process. Bondholders are weighing a proposal put forth by the government.

Ghana is resisting calls by holders of the country’s eurobonds to offer a sweetener for restructuring $13 billion of debt, risking a self-imposed deadline for a deal, Bloomberg News reported. Investors have asked Ghana to link interest payments on some of the debt to the future economic growth of the West African nation. Bondholders want Ghana to mirror Suriname, which last year issued a so-called value-recovery instrument that pays out if the nation becomes oil-rich.

Ghana has won a moratorium with official creditors on debt payments through May 2026, and expects to reach a deal with eurobond investors to revamp $13 billion debt by the end of March, Bloomberg News reported. Finance Minister Ken Ofori-Atta said the payments owed on $5.4 billion of bilateral obligations would be repaid in two tranches in 16 and 17 years’ time, under the terms of the deal struck in principle last week. It was the first time he has publicly shared these details of the pact.