ACCRA: Ghana has reached a deal with banks to restructure fifteen billion Ghana cedi (1.36 billion dollars) of locally issued US dollar bonds and cocoa bills.
The West African country is looking for new terms for the restructuring of its domestic loans by the end of this month to be able to meet an International Monetary Fund deadline and focus attention on talks with external creditors.
Ghana’s First Domestic Debt Exchange
Ghana completed the first phase of its domestic loan exchange in February, with 85 per cent of eligible bondholders participating, but requires new terms for another 123 billion 11.18 billion to qualify for the next tranche of a 3 billion dollar IMF loan to address its worst economic meltdown in a generation, Reuters reported.
The loan comprises domestic dollar bonds, pension funds, cocoa bills, and debt owed to the central bank. The bills are securities released to meet the short-term liquidity needs of Ghana’s cocoa regulator Cocobod.
The government and the lenders have decided to convert 6.9 billion Ghana cedi worth of domestic US dollar bonds into 2-term loans with new decreased rates.
Another 8.1 billion Ghana Cedis worth of cocoa bills would be converted into a new bond at a 12 per cent yield, although some banks are holding out for 13 per cent.
The last cocoa bill released in February had a yield of 32.22 per cent.
The new loans have a 5-year maturity, starting from 2025.
Ghana, which defaulted on most external debt in December last year, aims to decrease its external debt interest repayments by 10.5 billion dollars over the next three years under an IMF bailout secured in May.
A memorandum of understanding (MoU) for the domestic US dollar bonds has been sent to the securities and exchange commission for approval.
