Government Commences Domestic Exchange For $809 Million Dollar Bonds2 min read

A statement from the Ministry of Finance dated July 14, 2023, said the government is targeting $809 million denominated domestic notes and bonds.

“The Government of the Republic of Ghana announced today that it is inviting Eligible Holders to exchange approximately USD 809 million of its U.S denominated domestic notes and bonds for a package of new bonds to be issued by the Republic”, the statement said.

It explained that the U.S dollar denominated bonds are bonds issued domestically by the government governed by Ghanaian law.

“For the avoidance of any doubt, this Invitation is separate from the invitation to exchange launched in December 2022 and concluded in February 2023, and does not involve any cedi-denominated securities”.

It added that the reasons justifying the invitation to exchange launched in December 2022 remain valid and continue to justify the domestic debt exchange programme.

“The successful completion of this programme will allow our country to restore sound public finance and sustainable debt levels and to kickstart economic growth following the impact of the COVID-19 pandemic and the global economic shock created by the war in Ukraine”.

According to government, the invitation to exchange is an arrangement through which holders of Eligible Bonds will submit their holdings of Eligible Bonds governed by Ghanaian law and denominated in U.S.$ dollars (U.S.$) for new benchmark Government of Ghana bonds denominated in U.S.$, with the same aggregate principal amount (plus applicable capitalized accrued and unpaid interest), and which have in the aggregate a lower average coupon and extended average maturity than the Eligible Bonds.

The statement stressed that the successful completion of the domestic debt exchange is a critical component of both the debt reduction programme and the programme discussions with the International Monetary Fund (IMF); it will contribute to unlocking the support of the international community and will allow Ghana to achieve its debt targets. As such, the Government calls for the full participation of all holders of Eligible Bonds.

“The Government expects overwhelming support for this exchange. The alternative would be a far worse economic crisis, with protracted closure from international markets (including imported goods and services) and further domestic economic instability both for the real economy and the financial sector. It would also mean depleted fiscal resources to support the vulnerable”.