Despite announcing a debt restructuring programme which will affect interest payments in 2023, government has made a coupon payment on a treasury note that matured on Tuesday, January 3rd, 2023.
The coupon payment on the government instrument was 18.5%.
Joy Business understands that the interest payment was honoured because the domestic debt exchange is yet to fully take off.
The programme has been postponed twice with the latest deadline being January 16, 2023.
Government is also expected to honour other interest payments on other debt instruments that are expected to mature before or on January 16, 2023.
In the Amended Debt Exchange Memorandum, government stated that “Eligible Holders whose validly submitted Offers are accepted by the Republic will receive on the Settlement Date principal amounts of New Bonds (rounded down to the nearest 1.00) calculated with the following consideration ratios (the “Exchange Consideration Ratios”) per applicable principal amount of Eligible Bonds tendered plus Accrued Interest Payable and, solely in respect of Eligible 2023 Bonds, such Eligible Holders will also receive the Eligible 2023 Bonds Tender Fee (rounded down to the nearest GHS cent).
Debt Exchange: No haircut on principal but coupon payment to be affected
Finance Minister, Ken Ofori-Atta, has stated that the ‘Invitation to Exchange’ to individual bondholders under the Debt Exchange does not embed any principal haircut on eligible bonds.
According to him, it rather involves an exchange for new Government of Ghana bonds with a coupon that steps up to rates ranging from 9.15% to 10.65% (depending on the specific series of new bonds) as soon as 2025 and longer average maturity.
In an Amended and Restated Exchange Memorandum to individual bondholders, Mr. Ofori-Atta said this domestic debt exchange is part of a more comprehensive agenda to restore debt and financial sustainability.