By The government has resumed servicing its Eurobond debts following the completion of the exchange program with bondholders last week.
It is reported that a total of US$520 million has been paid to Eurobond holders, which includes $120 million as a consent fee for bondholders who agreed to exchange their old bonds under specific conditions.
Market analysts have described this as a special consideration payment designed to incentivize bondholders to participate in the Debt Exchange Program.
The consent fee comprised $10 per $1,000 of the recognized principal amount for the exiting notes.
Additionally, the government has paid approximately $320 million to investors. These are coupon payments that Ghana was unable to make to Eurobond holders due to the debt service freeze announced by the government in 2022.
However, as part of the debt restructuring agreement, the government was required to make these payments as soon as the debt deal was finalized this year.
Coupon Payments to Eurobond holders
The government is expected to begin coupon payments to bondholders in January 2025, with the next payment scheduled for July 2025.
This represents the initial timeline for the anticipated coupon repayments in 2025.
The government has informed journalists that it believes the Bank of Ghana has established the necessary dollar buffers to support debt servicing.
According to the Bank of Ghana’s Economic and Financial Data as of August 2024, the country’s international reserves stood at $7.5 billion, providing 3.4 months of import cover.
Eurobond Debt Restructuring Deal
The government concluded the Eurobond Debt Exchange Programme last week, successfully having nearly 100 percent of bondholders trade their old bonds for new ones.
This allowed the government to restructure the $13 billion debt owed to Eurobond investors, enabling it to resume servicing its debts to these creditors.
However, regarding repayment to bilateral creditors, the government is expected to begin repayments in 2026.
Finance Minister Dr. Mohammed Amin Adam has revealed that the ministry has submitted a proposal to the cabinet outlining the best investment options for establishing a Sinking Fund, aimed at alleviating the fiscal burden when repayments begin in 2026.
