COMMENCEMENT OF DOMESTIC DEBT EXCHANGE IN RESPECT OF GHANA’S U.S.$­ DENOMINATED DOMESTIC BONDS

On the 14th of July 2023, The Government of the Republic of Ghana announced the commencement of domestic debt exchange programme in respect of Ghana’s US Dollar denomination bonds. The Government of Ghana launched an invitation for eligible holders to exchange approximately US$809 million of US dollar-denominated domestic bonds maturing in 2023 and 2026. This follows the previous successful exchange of Ghana cedi-denominated bonds concluded in February 2023.

The aim is to restore sound public finances and debt sustainability as part of IMF program discussions and secure support from the international community. Eligible bondholders tendering their bonds will receive new bonds of equivalent principal value but with lower average coupons and longer maturities.

The invitation is open from July 14 to August 4, 2023. Eligible holders will receive a package of new bonds split evenly between new 2027 and 2028 maturities. The new bonds will pay semi-annual interest starting January 2024.

The Central Securities Depository will facilitate the exchange process for eligible Ghanaian depository participants holding the bonds. The government urges full participation to avoid a worse economic crisis from lack of market access and instability.

Here is a summary of the key points from the press release regarding Ghana’s invitation to exchange US dollar-denominated domestic bonds. I have captured ten major takeaways in the bullet points below:

1. Ghana is inviting holders of US$809 million of domestic US dollar bonds to exchange for new bonds.
2. This follows the previous successful cedi bond exchange concluded in February 2023.
3. It is part of debt reduction efforts and IMF program discussions.
4. Eligible holders will receive new bonds of equivalent principal but lower coupons and longer tenors.
5. The invitation is open from July 14 to August 4, 2023.
6. New bonds will comprise equal splits of 2027 and 2028 maturities paying semi-annual interest.
7. The Central Securities Depository will facilitate exchange process for depository participants.
8. Full participation is urged to avoid economic crisis from lack of market access.
9. The exchange will restore sound public finances and debt sustainability.
10. It aims to secure international community support.

It appears individual bond holders have no alternative but to obey to the invitation of the powers that be.

In an interview on Metro TV, listen to what Dennis Adu-Gyasi said as captured.