DDE: Bondholders To Get 5% Coupon For 2023

Ken Ofori-Atta

The government has revised some terms of its Domestic Debt Exchange Programme (DDEP) following its crunch discussions with the Ghana Association of Banks.

This has resulted in significant progress between the government and Association of Banks on the terms for the participation of banks in the DDEP.

Initially, the new bonds under the programs were not to accrue any interest until 2024. It was to start at 0 percent coupon in 2023 which will steps up to 5 percent in 2024 and 10 percent from 2025.

However, following the discussions between the Bankers and the Ministry of Finance, bondholders will now get a 5 percent coupon in 2023.

Per a joint press release by the Finance Ministry and Ghana Association of Banks, this will also translates into an effective coupon rate of 9 percent.

This agreement encompasses final improvements to the terms of the DDEP, namely:

a. An agreement to pay 5% coupon for 2023 and a single coupon rate for each of the 12 new bonds, resulting in an effective coupon rate of 9%.

b. Clarity on the operational framework and terms of access to the Ghana Financial Stability Fund (GFSF).

c. The removal or amendment of all clauses in the Exchange Memorandum that empower the Republic to, at its sole discretion, vary the terms of the Exchange.

The statement believes this progress achieved is a milestone to addressing the economic challenges confronting the country and help restore macro-economic stability and accelerate the country’s economic growth.

“The GAB recognizes the progress made and notes that participation of its member banks in the DDE, per the new terms, is subject to each individual bank’s internal governance and approval process but in any case, not later than 30th January 2023”, except of the joint statement read.

This comes after the Ghana Association of Banks last week asked its members to stay any further engagement in the DDEP until their demands have been met.

The government is optimistic in concluding the DDEP in time with all stakeholders.

Already, the government has extended the deadline for the registration of the Domestic Debt Exchange Programme to 31st January 2023.

The government admitted that Banks remain important in The DDEP because of the key role they play in the programme.

Find copy of the statement below.


By Vincent Kubi