Ghana and Bondholders to Resume Talks on $13 Billion Debt Restructuring


ACCRA/LONDON/NEW YORK, June 13 (Reuters) – Ghana and its bondholders are set to restart negotiations next week to finalize a debt restructuring deal for $13 billion in international bonds, according to four sources. This follows an agreement reached with official creditors earlier this week.

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Ghana, a major gold and cocoa producer, defaulted on most of its $30 billion external debt in 2022. The default was precipitated by the COVID-19 pandemic, the war in Ukraine, and rapid global interest rate hikes, which increased borrowing costs.

Formal talks with two groups of bondholders began in mid-March: one comprising Western asset managers and hedge funds, and another including regional African banks. However, negotiations stalled in April when the proposed deal failed to meet the International Monetary Fund’s (IMF) debt sustainability analysis (DSA) requirements. Both sides are under pressure to finalize an agreement before the December elections.

Sources familiar with the situation told Reuters that government advisors contacted bondholder group counterparts shortly after finalizing the deal with official creditors on Tuesday. The advisors shared information about the official creditor deal and details from the IMF’s new debt sustainability assessment.

“People are incentivized,” one source said. “Things can happen quickly.”

Ghana’s Finance Ministry did not respond to a request for comment. The shared information will form the basis for next week’s discussions, with financial advisors currently reviewing the data.

Previous discussions with the two bondholder groups, holding roughly $13 billion in Ghana’s overseas bonds, failed to meet the IMF’s debt-sustainability targets as outlined in the fund’s first review of its $3 billion loan program with Ghana. However, Ghana’s economic situation has improved since then, and two sources indicated that they expect the new deal to comply with the IMF’s adjusted DSA, following the second review concluded in early April.

By Naija247news
By Naija247news
Naija247news is an investigative news platform that tracks news on Nigerian Economy, Business, Politics, Financial and Africa and Global Economy.

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