Government offers revised terms to domestic bondholders

Emmanuel Bruce Business News Jan - 31 - 2023 , 16:41

Government has revised the terms of Domestic Debt Exchange Programme (DDEP) for individual bondholders who wish to participate in the programme.

Per the new terms, individual bondholders who are below the age of 59 years will be offered instruments with a maximum maturity of 5 years, instead of 15 years, and a 10 per cent coupon rate.

All retirees (including those retiring in 2023) will also be offered instruments with a maximum maturity of 5 years, instead of 15 years, and a 15 per cent coupon rate.

A release issued by the Ministry of Finance said discussions were also being finalised with Organized Labour and Pension Fund Trustees, on a separate arrangement in accordance with the Memorandum of Understanding signed with Organized Labour on 22nd December 2022, and in line with the government’s debt management Programme.

Extension

The release noted that these developments have necessitated the final extension of the deadline from January 31, 2023, to Tuesday, February 7, 2023, and a new settlement date of Tuesday, February 14, 2023, that will be confirmed via the new Exchange Memorandum.

With these new terms, the government in the release encouraged all stakeholders to participate in the DDEP, an essential step towards meeting the country’s debt sustainability targets and restoring macroeconomic stability and economic growth.

The release also affirmed that all individual bondholders are free not to participate; however, upon a successful DDEP there will be very few of the ‘old bonds’ in circulation, and likely limit its tradability.

Significant progress

The release also pointed out that significant progress had been made with all stakeholders, including financial sector industry associations and representative groups of individual bondholders, with respect to their participation in the DDEP.

“The Government hereby announces that based on the agreement reached with the Ghana Association of Banks (GAB), Ghana Insurers Association (GIA), and the Ghana Securities Industry Association (GSIA), the new terms of the exchange have been accepted.