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Ghana’s bondholders to re-engage government next week on debt rework

By Thomson Reuters Jun 13, 2024 | 3:36 PM

By Maxwell Akalaare Adombila, Libby George and Rodrigo Campos

ACCRA/LONDON/NEW YORK (Reuters) – Ghana and its bondholders will restart talks next week to hash out a debt restructuring deal on $13 billion of international bonds, four sources told Reuters, on the heels of a deal finalised with official creditors earlier this week.

Ghana, a gold and cocoa producer, defaulted on most of its $30 billion in external debt in 2022, weighed by the COVID-19 pandemic, the war in Ukraine and rapid global interest rate hikes that boosted borrowing costs.

It had kicked off formal talks with two groups of bondholders in mid-March – a group of Western asset managers and hedge funds and another one including regional African banks.

But negotiations stalled in April after the proposed deal failed to meet the International Monetary Fund’s debt sustainability analysis (DSA) requirements, and both sides are under pressure to finalise an agreement before December elections.

The sources familiar with the situation told Reuters that government advisors had reached out to their counterparts at the bondholder group hours after the government and official creditors concluded their deal on Tuesday.

The government advisors shared information on the official creditor deal as well as details from the new debt sustainability assessment from IMF, the sources said, speaking on condition of anonymity.

“People are incentivized,” one of the sources said. “Things can happen quickly.”

Ghana’s Finance Ministry did not respond to a request for comment.

The information shared will form the basis for discussions next week, two of the sources said, adding that financial advisors are currently reviewing the information.

Discussions with two groups holding roughly $13 billion in Ghana’s overseas bonds previously failed to reach a deal that met the IMF’s debt-sustainability targets as set out in the first review of the fund’s $3 billion loan programme with the country.

However, Ghana’s economic situation has improved since then, and two sources said they expected the deal to be compliant with the fund’s adjusted DSA on the back of the second review which concluded in early April, two of the sources said.

(Reporting By Libby George and Karin Strohecker in London, Maxwell Akalaare Adombila in Accra and Rodrigo Campos in New York, Editing by Angus MacSwan)