The Los Angeles Post
California & Local U.S. World Business Lifestyle
Today: January 15, 2025
Today: January 15, 2025

Ghana reaches deal in principle with bondholders on $13 billion debt, sources say

FILE PHOTO: FILE PHOTO: People make trade in Accra
June 20, 2024

By Maxwell Akalaare Adombila

ACCRA (Reuters) - Ghana has reached an agreement in principle with its bondholders to restructure $13 billion worth of international debt, three sources told Reuters, after finalising a deal with official creditors earlier this month.

Bondholders will take a haircut on principal of up to 37% and maturity of the bonds lengthened, two of the sources said on Thursday.

Ghana's dollar bonds rallied on the Reuters report, with the 2027 bond rising to its highest price since 2022, Tradeweb data showed.

The West African gold and cocoa producing nation defaulted on most of its $30 billion of international debt in 2022, as the strain of the COVID-19 pandemic, war in Ukraine and higher global interest rates tipped it into crisis after years of overspending.

Like fellow African defaulter Zambia, Ghana also signed up for the G20's so-called 'Common Framework', a process designed to facilitate quick debt overhauls and to bring the newest large bilateral lender, China, into the process.

Zambia has been finalising its restructuring in recent weeks and for Ghana "things are pretty close," one source said. "We can expect an announcement by next week," they added, asking not to be named because they were not authorised to speak to media.

The other two sources said the announcement could come as soon as Friday.

Ghana's finance ministry and the Paris Club, an alliance of largely Western creditor nations, did not immediately respond to requests for comment.

FINISHING LINE IN SIGHT

Banking analysts at Tellimer said the 37% writedown bondholders were expected to take as part of the deal was probably at the "upper-end" of its expectations.

The world's No.2 cocoa producer started formal talks with two groups of its bondholders in March - a group of Western asset managers and hedge funds and another set including regional African banks.

The negotiations, however, stalled in April after the proposed deal failed to meet the International Monetary Fund's (IMF) debt sustainability requirements.

The three sources said the plan has been tweaked to fit a revised IMF debt framework that has recently been shared with bondholders, meaning the agreement in principle has been struck.

Earlier this month, Ghana also finalised an agreement with its official sector creditors initially struck in January.

The outlines of the agreement paved the way for the IMF executive board to hold a June 28 meeting on Ghana to consider a second review of its $3 billion loan, three-year package and the release of the next tranche of $360 million.

(Additional reporting by Duncan Miriri in Nairobi and Marc Jones in London; Editing by Alessandra Prentice, Shri Navaratnam, Jamie Freed and Alexander Smith)

Related

Africa|Crime|Health|World

Rescuers try to free men trapped in South African gold mine with scores reported dead

Rescuers try to free men trapped in South African gold mine with scores reported dead

Rescuers try to free men trapped in South African gold mine with scores reported dead
Africa|Crime|Health|Political|World

‘Please help us’: Gold miners beg for help while trapped in South African mine

Video released by a human rights group in South Africa appears to show emaciated miners and dead bodies wrapped in plastic in an abandoned mine in the country’s northwest region, although CNN is not able to independently verify the video. South Africa’s Department of Mineral Resources and Energy says a rescue operation plan is now underway at the mine where more than 100 people are suspected dead.

‘Please help us’: Gold miners beg for help while trapped in South African mine
Africa|Americas|Crime|World

More than 1 million people displaced by raging Haiti gang violence, UN says

More than a million people, over half of them children, are now displaced within Haiti where gang violence continues unabated despite the start of a United Nations-backed security

More than 1 million people displaced by raging Haiti gang violence, UN says
Africa|Crime|Election|Political

Ugandan military court rules it can try opposition figure on treachery charge carrying death penalty

A prominent opposition figure in Uganda will stand trial on the serious charge of treachery, a military court ruled Tuesday, escalating the legal trouble Kizza Besigye faces ahead of presidential elections scheduled for 2026

Ugandan military court rules it can try opposition figure on treachery charge carrying death penalty
Share This

Popular

Africa|Health|World

Suspected outbreak of Marburg virus kills eight in Tanzania, WHO says

Suspected outbreak of Marburg virus kills eight in Tanzania, WHO says
Africa|Crime|World

Body count from South African mine siege rises to 60

Body count from South African mine siege rises to 60
Africa|Election|Political|World

Zimbabwe's Zanu-PF wants to extend president's term by two years

Zimbabwe's Zanu-PF wants to extend president's term by two years
Africa|Crime|World

South Africa pulls 36 corpses from illegal mine, arrests 82 survivors

South Africa pulls 36 corpses from illegal mine, arrests 82 survivors