Ghana: Domestic Debt Exchange Programme - Govt Pays Gh¢2.4 Billion to Bondholders - Finance Ministry

23 August 2023
Ghanaian Times (Accra)

The Ministry of Finance (MoF) has paid GH¢2.4 billion for the settlement of bonds affected by the Domestic Debt Exchange Programme (DDEP).

This followed the maturity of some of the coupons which were restructured under the programme.

In a post on Twitter yesterday, the Ministry indicated that it had issued instructions sent for the settlement of the affected bondholders.

The Ministry said, the payment was in line with government's commitment to the continued success and credibility of Ghana's domestic debt operation.

"In line with government's commitment to the continued success and credibility of Ghana's domestic debt operations, instructions have gone out for the settlement of the GH¢ 2.4 billion first coupon payment of the DDEP, due today," the Ministry added.

It explained that, currently new bonds now stood as the dominant instruments in Ghana's domestic bond market which would form the basis for rapid economic recovery.

The Ministry assured the public that it remained committed to the success of the new bonds.

In February this year, the government, through the Ministry restructured about GH¢87.76 billion of existing bonds to 16 new bonds with varied maturing dates ranging from August 2027 up until August 2038.

The new bonds came with varied interest rates of up between five per cent and 15 per cent on the new bonds to be paid semi-annually.

The restructuring, under the DDEP, which was part of effort to restructure Ghana's unsustainable debt burden, gave eligible bondholders the option to exchange their old bonds for new bonds with lower interest rates and longer maturities.

The coupon payment for the affected bonds was agreed to be five per cent which was lower than the interest rates on the old bonds.

In July, the Ministry said it had fully paid all coupons and principals maturing up to June 19, 2023.

The ministry said it had also issued instructions for coupon payments until July 10, 2023.

This was in fulfillment of an agreement between the government and the Coalition of Individual Bondholders Groups (CIBG), which comprises members of the Individual Bondholders' Forum (IBF) and the Individual Bondholders' Association of Ghana (IBHAG), which was signed in May this year.

Earlier, the CIBG, which comprises the Ghana Individual Bondholders Forum and the Individual Bondholders Association of Ghana, had threatened to stage a protest at the Finance Ministry to demand the settlement of outstanding principals and coupons.

Their discontent stemmed from the government's failure to adhere to the agreed payment plan outlined in the MoU.

Also, there were initial market uncertainties about whether the government would be able to make the five per cent coupon payment.

 

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