Ghana recently completed the restructuring of about $13 billion of its Eurobond debt, marking a significant milestone in its efforts towards financial recovery and debt sustainability.
Over 98% of bondholders participated in the debt restructuring, showcasing strong support from creditors. This high participation rate is crucial for the success of such financial maneuvers.
The restructuring involved a haircut on the principal, with the rate increased to 37% from an earlier proposal of 33%. This adjustment in terms was part of negotiations to meet the requirements set by the International Monetary Fund (IMF) for further financial support.
This restructuring is a key step in Ghana’s broader economic strategy under its IMF programme, aiming to reduce its debt-to-GDP ratio to around 55% by 2028, which is part of the conditions for ongoing IMF support and reviews.
The successful restructuring is seen as turning a page for investors in Ghana, potentially signaling a return to international financial markets with renewed confidence.
This move is expected to help normalize relations with international capital markets, providing Ghana with better access to global financing.
Bondholders had options including a “Disco menu” of new notes and a “Par menu” with a cap, indicating a structured approach to manage the debt overhaul while offering flexibility to investors.
This restructuring not only addresses immediate financial pressures but also aims to restore investor confidence, paving the way for economic recovery and potentially more favorable terms in future borrowings.
