Government reopens debt exchange for GHC12.9 billion of local bonds

The government has announced the reopening of a debt exchange programme for holders of domestic bonds who did not participate in the deal that closed in February.

This is in exchange for a package of new tranches of the same new bonds issued by the Government as part of the February 2023 Domestic Debt Exchange Programme (DDEP).

The value of eligible bonds, excluding Pension Funds Bondholders that are targeted for the programme, is estimated at GHS12.9 billion.

A breakdown of the figure consists of GHS137.4 million Daakye Trust Plc, GHS1.1 billion ESLA Plc and GHS11.7 billion Republic of Ghana bonds.

The essence of the exercise, which ends on September 22, 2023, according to the ministry, was to allow eligible bondholders who could not participate in the February 2023 Exchange on time to do so with the possibility of the Government prioritising payments on the new bonds over eligible bonds.

“We believe that there is value for bondholders to participate in this invitation. Indeed, the new bonds, which will include the new tranches, are expected to be more liquid than the Eligible Bonds, considering the base and the benchmark size of the new bonds.

“The terms of this Invitation are identical to the terms of the February 2023 Exchange except that the relevant dates for this reopening exercise have changed as indicated in the Exchange Memorandum,” the Ministry of Finance said in a press statement.

The statement also indicated that the government will issue the new tranches on September 29, which is the reopening settlement date, to Eligible Holders whose offers are accepted for credit to the account of such Eligible Holders at the Central Securities Depository (CSD).

Pursuant to the February 2023 Exchange, the Government accepted tenders from a significant majority of the holders of the securities which were within the scope of the February 2023 Exchange.

In all 16 series of the new bonds to the persons whose tenders were accepted were issued.

This approximately consisted of 85 per cent in respect of the relevant domestic GHS treasury notes and bonds, 77 per cent of the bonds issued by E.S.L.A Plc, and 94 per cent in respect of the bonds issued by Daakye Trust Plc).