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Bond Market News
Ghana’s Bondholders Demand Sweetened Restructuring Deal
March 7, 2024
Ghana’s bondholders are demanding a sweetener for restructuring $13bn of its debt. The offshore bondholders want the interest payments on some of Ghana’s debt linked to future economic growth of the nation, according to sources. Under the proposal, bondholders want Ghana to issue a value recovery instrument, a type of sovereign state contingent debt instrument (SCDI) where interest payments will increase should economic growth accelerate faster than targets set by the IMF. The sources added that the bondholders may accept haircuts of 25-30% if Ghana agrees to issue such instruments. Ghana is opposing issuing such instruments, a move which could delay the deadline to reach an accord and secure further funding from the IMF.
Earlier this year, Ghana reached an agreement with its bi-lateral creditors. Ghana’s dollar bonds continue to trade at distressed levels of 43-46 cents on the dollar.
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