After updating the DDE with corporate partners, the government has extended the Domestic Debt Exchange program (DDEP) for a fourth time, this time until February 7, 2023.
The DDE is a component of the government’s efforts to convince the International Monetary Fund (IMF) that the debt is manageable and to win over creditors to the $3 billion loan-support program.
The new date was announced by the Finance Ministry on Monday. The release noted that “Ghana has made significant progress with all stakeholders.”
It stated that the Ghana Association of Banks (GAB), Ghana Insurers Association (GIA), and the Ghana Securities Industry Association have negotiated revised parameters of an agreement on the program (GSIA).
As a result, by Thursday, February 2, 2023, a “updated and final” Exchange Memorandum would be published, which, among other things, would give individual bonds the chance to participate in the DDE notwithstanding the exemption.
The Government urged all bondholders to start all administrative procedures leading to their participation in the Exchange in accordance with the agreements made.
The Ministry said that all individual bondholders were allowed to opt out of the DDE and that this was confirmed in the revised Exchange Agreement.
But if the DDE scheme is a success, there won’t be many of the “old bonds” around, which will probably limit their trade-ability, it stated. In this direction, securities with a maximum maturity of 5 years instead of 15 years and a 10% coupon rate are being offered to all individual bondholders under the age of 59.
Also, instead of 15-year instruments with a 15% coupon rate, all retirees (including those retiring in 2023) would be issued instruments with a maximum maturity of 5 years.
As part of a separate agreement under the Memorandum of Understanding agreed with Organized Labor on December 22, 2022, and in accordance with the government’s debt management policy, the Ministry stated that it was finalizing conversations with Pension Fund Trustees and Organized Labor.
In light of this, the statement said, “Government urges all stakeholders to engage in the DDEP, a crucial step towards attaining our debt sustainability targets and restoring macroeconomic stability and economic growth.
Via the statement, the government expressed its gratitude for the friendly interactions with the different stakeholders since the DDE program’s inception, which had made such exceptional success possible.
With the hope of receiving approval from the Executive and Board Management by the end of March 2023, the Government and IMF concluded a Staff Level Agreement in December of last year for a $3 billion, three-year arrangement under the Extended Credit Facility (ECF).