Government and banks agree restructuring deal on some domestic debt

Ghana is seeking new terms for restructuring its domestic debt by the end of June to be able to meet an International Monetary Fund deadline

The Government of Ghana has reached an agreement with banks to restructure GHC15 billion (US$1.36 billion) of locally issued US dollar bonds and cocoa bills, three sources close to the negotiations have told Reuters.

Ghana is seeking new terms for the restructuring of its domestic debt by the end of June to be able to meet an International Monetary Fund (IMF) deadline, and focus attention on negotiations with external creditors.

The country concluded the first phase of its domestic debt exchange in February, with 85% of eligible bondholders participating, but needs new terms for another GHC123 billion (US$11.18 billion) to qualify for the next tranche of a US$3 billion IMF loan to address its worst economic crisis in a generation.

The debt comprises domestic dollar bonds, cocoa bills, pension funds and debt owed the central bank. Cocoa bills are securities issued to meet the short-term liquidity needs of the country’s cocoa regulator, COCOBOD.

The sources, two in the Finance Ministry and one at a bank that holds some of the bonds, said the government and the lenders have agreed to convert GHC6.9 billion worth of domestic US dollar bonds into two term loans with new lower rates.

Another GHC8.1 billion worth of cocoa bills will be converted into a new bond at 12% yield, although some banks are holding out for 13%, a banking source said. The last cocoa bill issued in February 2023 had a yield of 32.22%.

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