Bondholder committee reaches agreement in principle with Ghana on debt restructuring

 

The Committee of holders of Ghana’s Eurobonds has announced that it has reached an agreement in principle with the government of Ghana on a restructuring of the Eurobonds.

This was captured in a statement released by the Bondholder committee today, Monday, June 24.

Details of the Agreement

The statement showed that the proposed agreement on the restructuring of the Eurobonds will resolve Ghana’s default on the Eurobonds in a manner that, “It will provide significant cash flow and debt stock relief to support Ghana’s economic recovery in the context of the IMF-financed programme.”

“Alongside debt relief, the Committee recognises that the most important factor to support Ghana’s fiscal and debt sustainability going forward is sustained economic policy implementation to bolster macroeconomic stability, improve the investor environment and institutionalise fiscal credibility “it added.The Committee also maintained that, in particular, the Committee welcomes the government’s commitment to reinstate and implement an amended Fiscal Responsibility Act

Measures being implemented by the Government following this agreement

The Bondholder Committee also revealed that the government has adopted nonfinancial provisions included in the agreement-in-principle, such as the semi-annual disclosure of public debt, the most-favoured-creditor clause and loss reinstatement clause, which are part of the package of measures to normalize relations with bondholder investors and to progress towards restoring Ghana’s international market access.

It also revealed that the implementation of the agreement-in-principle is subject to mutual agreement on deal documentation and other stated conditions.

Committee advice to bondholders

The Committee encourages all holders of the Eurobonds to carefully consider the terms of the government’s prospective offer about the agreement-in-principle and to make their own independent appraisal of the merits and risks of participation.

It also disclosed that Members of the Committee include the following holders (acting either directly or on behalf of funds or the accounts they manage): Abrdn; Amundi (UK) Limited; Grantham, Mayo, Van Otterloo & Co. LLC; Greylock Capital Management; Neuberger Berman and Wellington Management.