Over 98% of Eurobond investors back Ghana’s debt restructuring plan

Ghana's Eurobond restructuring effort has gained significant traction, with over 98 per cent of investors participating in the country's consent solicitation, the Minister of Finance, Dr Mohammed Amin Adam, has announced.

The debt treatment yielded a 37 per cent reduction in the nominal value of Ghana's debt, equivalent to $5 billion forgiveness, $4.3 billion in debt service savings during the International Monetary Fund (IMF) programme. 

The high level of subscription marks a crucial step in Ghana's debt restructuring process.

Ghana last month launched a consent solicitation and exchange offer on the London Stock Exchange.

The launch was to seek the consent from Eurobond investors who the country owed $13 billion to amend the original terms of the bond.

The consent solicitation comes on the back of a recent agreement with Eurobond holders which will see the investors take a 37 per cent haircut on their investments, and a suspension of coupon payments until 2026. 

Addressing the media in Accra on Thursday [Oct 3, 2024], Dr Amin Adam said the 98.6 per cent participation exceeded the government’s target of 65 per cent.

He said this impressive result surpassed international benchmarks and demonstrated the strong support of Ghana's bondholder community across Africa and in the international markets. 

“As a result of this successful debt exchange, the country will exchange $13 billion in Eurobonds for new bonds in the coming weeks,” he said.

Financial relationships 

The minister said the development also cures Ghana's default on international bonds, paving the way for normalised financial relationships with rating agencies and international markets. 

He said the country has now restructured over 90 per cent of its eligible external debt, marking a significant milestone in its economic recovery.

“Ghana has achieved significant debt relief and in record time. By this feat, Ghana has accomplished a remarkable milestone in its debt restructuring journey, completing its Eurobonds debt exchange in under nine months. 

“This swift action showcases the government's unwavering commitment to restoring financial and debt sustainability, the minister added.

Debt relief 

Additionally, he said, the average interest rate on the bonded debt had decreased from over eight per cent to less than five per cent.

“This achievement is a testament to Ghana's dedication to economic recovery and sets the stage for improved fiscal management and sustainable growth.

“Our debt exchange also entailed some non-financial clauses, which are becoming the new market standards,” he stated.

Dr Amin Adam said Ghana's debt exchange includes non-financial clauses that reflect the government's commitment to prudent debt management, transparency, and inter-creditor equity.

Tireless effort 

The Minister of Finance said the country’s successful debt exchange was a testament to the tireless efforts and dedication of the Government.

Dr Amin Adam added that the achievement marked an unprecedented success, positioning Ghana for a brighter economic future. 

With this milestone, he said the country could not we could not close a significant chapter on its debt restructuring; shift focus towards sustainable economic growth and development; and build on the momentum of this accomplishment to drive further progress.