“Ghana Clears Major Hurdle in Bond Restructuring, Gains Official Creditor Approval”


ACCRA, July 8 (Reuters) – Ghana has achieved a crucial milestone in its efforts to restructure its international bonds, receiving confirmation from its official creditors that the proposed debt reorganization is equitable for bondholders.

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In a statement on Monday, Ghana’s finance ministry announced, “The Ministry has received formal confirmation from its Official Creditor Committee (OCC) that the Agreement in Principle reached with representatives of Eurobond holders aligns with the Comparability of Treatment principle.”

“Comparability of Treatment,” a principle endorsed by the Paris Club of wealthy creditor nations, ensures that member countries do not provide disproportionately favorable terms to any particular group of creditors, whether public or private.

A spokesperson from the Paris Club affirmed that the OCC determined Ghana’s bond restructuring deal offers comparable treatment across different types of creditors. According to Leeuwner Esterhuysen, economist at Oxford Economics Africa, this endorsement paves the way for Ghana to initiate the issuance of new bonds to replace those being restructured. “The country aims to commence the bond exchange this month and complete it by the end of September,” he added.

Ghana previously finalized a $5.4 billion loan restructuring deal with its Official Creditor Committee in January, which includes major creditors such as China and France. Following suit, Ghana reached a preliminary agreement in late June with two groups of bondholders to restructure approximately $13 billion of its international bonds, following Zambia as the second African nation in recent weeks to advance towards resolving its debt challenges.

The next step for the government is to seek approval from all bondholders for the proposed restructuring deal, which, if endorsed, will finalize the comprehensive debt reorganization plan. Ghana, known for its exports of gold and cocoa, faced severe financial strain after defaulting on a significant portion of its $30 billion external debt in 2022, exacerbated by the COVID-19 pandemic, the Ukraine conflict, and global interest rate hikes.

By Naija247news
By Naija247newshttps://www.naija247news.com/
Naija247news is an investigative news platform that tracks news on Nigerian Economy, Business, Politics, Financial and Africa and Global Economy.

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