Ghana has submitted a fresh proposal to its international bondholders in an effort to advance the restructuring of $13 billion in eurobonds. According to sources familiar with the situation, advisers for the foreign creditors are currently assessing the new terms, which were presented by the government’s representatives earlier this week.
While the specifics of the offer remain undisclosed, one insider noted that if there is tentative agreement on the terms, both parties could soon enter into non-disclosure agreements, indicating a potential nearing of a formal deal.
Both the Ghanaian Finance Ministry and the committee representing the bondholders have declined to comment on the matter. The committee, based in Washington, did not respond to requests for comments, and the Finance Ministry declined to elaborate when contacted by phone.
In a separate but related development, Ghana reached an agreement on Wednesday with its bilateral creditors, including France and China, to provide relief on $5.1 billion of debt under an International Monetary Fund (IMF)-supported programme. Ghana is in the process of restructuring nearly all of its $44 billion in obligations as part of the IMF loan.
Negotiations with private creditors concerning the $13 billion of eurobonds had stalled in April after the initial proposal was found to breach the IMF’s debt sustainability parameters. At the time, the government indicated its willingness to revise the terms. The April proposal suggested bondholders would be repaid 71 cents on the dollar, whereas a deal in principle with Ghana’s official creditors would return 62 cents on the dollar, as reported by London-based Debt Justice.
Ghana’s eurobonds maturing in 2026, 2027, and 2030 emerged as the top performers in emerging markets by percentage gained as of 9:07 a.m. in London, according to Bloomberg data. The country’s bonds due in 2030 were trading at 68.5 cents on the dollar, their highest level since September.
A critical aspect of the ongoing negotiations is the assessment of the Ghanaian economy’s performance relative to the IMF’s original projections. The IMF initially forecasted a growth rate of 1.5% for 2023; however, the Ghanaian economy expanded by 2.9% according to year-end data released by the government.
Ghana, the world’s second-largest cocoa producer, reached a staff-level agreement for the second review of its IMF programme two months ago, though the latest country report awaits the executive board’s approval. According to one source, the IMF’s updated macroeconomic framework has been shared with the advisers for Ghana’s bondholders.
The international creditor committee represents approximately 40% of Ghana’s outstanding notes. The steering committee includes representatives from Abrdn, Amundi (UK) Ltd, BlackRock, and Greylock Capital Management. The Ghanaian government is being advised by Lazard Inc. and Hogan Lovells, while the creditor committee is advised by Rothschild & Cie and Orrick, Herrington & Sutcliffe LLP. Additionally, another creditor group comprising regional African banks is being advised by Renaissance Capital Africa.
