Government resumes Eurobond debts servicing after completion of exchange programme with investors

Government has resumed servicing its Eurobond debts after the completion of the exchange programme with bondholders last week.

Sources say that a total amount of US$520 million has been paid to the Eurobond holders.

This included $120 million as a consent fee, for the bondholders who agreed to exchange their old bonds under certain conditions.

It has been described by market analysts as a special consideration payment about incentivizing bondholders to participate in the Debt Exchange Programme.

The Consent Fee consisted of $10 dollars per $1, 000 as recognized principal amount for exiting notes.

Government has also paid some $320 million to the investors.

These are coupon payments that Ghana should have paid to the Eurobond holders but was frozen, due to the debt service freeze announced by government in 2022.

However, under the agreement for restructuring the debt payment, government was supposed to make the payment as soon as the debt deal was completed this year.

Coupon Payments to Eurobond holders

Government is expected commence coupon payments to the bondholders in January 2025 and the next payment should be made in July 2025.

This is the initial schedule on the expected coupon re-payments for 2025.

Government has told JOYBUSINESS that it believes the Bank of Ghana has built the required dollar buffers to aid the servicing of the debts.

The Bank of Ghana’s Economic and Financial Data ending August 2024 showed that the Country’s International Reserves   stood at $7.5 billion dollars, representing 3.4 months of import cover.

Eurobond Debt Restructuring Deal

Government last week concluded the Eurobond Debt Exchange Programme, after it had almost 100 percent of bondholders’ trade their old bonds for new ones.

Government managed to restructure the $13 billion debt owed the Eurobond investors. The development paved the way for government to take steps to resume serving its debts owed the creditors.
However, with the servicing of the bilateral creditors, government is expected to commence repayment from 2026.

The Finance Minister Dr Mohammed Amin Adam has disclosed that the ministry has presented a proposal to cabinet over the best investment options in the setting up of Sinking Fund, to help reduce the fiscal burden when the time for repayment commences in 2026.