Dr. Mohammed Amin Adam
Minister of Finance, Dr. Mohammed Amin Adam, has announced the completion of the country’s Eurobond debt exchange.
The exchange, which was achieved in less than nine months, will see the exchange of US$13 billion in Eurobonds for new bonds in the coming weeks.
Speaking at a press briefing in Accra yesterday, Dr. Amin Adam said, the government obtained more than 98% consent, which is significantly higher than the 65% threshold from bondholders following the launch of the Exchange Offer and Consent Solicitation in September 2024.
“This impressive result surpasses international benchmarks and demonstrates the strong support of Ghana’s bondholder community across Africa and in the international markets,” he said.
He added that the development cures Ghana’s default on international bonds, paving the way for normalised financial relationships with rating agencies and international markets.
“In essence, Ghana has now restructured over 90% of its eligible external debt, marking a significant milestone in its economic recovery,” he said, adding “this swift action showcases the government’s unwavering commitment to restoring financial and debt sustainability.”
Key Benefits
Dr. Amin Adam said the agreement with bondholders has brought significant relief, including a 37% reduction in the nominal value of Ghana’s debt, equivalent to a US$5 billion reduction, and US$4.3 billion in debt service savings during the International Monetary Fund (IMF) programme.
“Additionally, average interest rate on the bonded debt has decreased from over 8% to less than 5%,” he added.
The Finance Minister indicated that the debt exchange also entailed some non-financial clauses, which are becoming the new market standards.
These include the loss reinstatement clause which protects bondholders by reinstating their nominal haircut in case of a new default within a specified timeframe, to ensure prudent debt management and prevent future defaults.
The information sharing clause also ensures timely publication of debt figures, promoting debt transparency and accountability while the most favoured creditor clause will ensure the country does not treat other commercial creditors more favourably than bondholders, upholding inter-creditor equity.
“These clauses demonstrate Ghana’s dedication to responsible debt management and transparency, aligning with international best practices,” he added.
A Daily Guide Report