The Minister of Finance, Ken Ofori Atta has restated that eligible bondholders who refuse to involve themselves in government’s domestic debt exchange programme (DDEP) will not benefit from the new arrangement outlined by government in case there is default in payment.
According to the Minister of Finance, Government is seeking an International Monetary Fund Program that requires a debt restructuring before a deal could be reached with the Bretton Wood institution. Bondholders have until January 17, 2023 to accept the new arrangement which include some suspension of interest payments, he said.
“For those not participating in the domestic debt exchange, they will continue to hold the non-tendered eligible bonds – the “old” bonds. However, the Government reserves the right to ensure that “old” bonds do not benefit from their non-participation in the domestic debt exchange, including through additional regulatory measures.”
Ken Ofori Atta
Ken Ofori Atta assured that, once there is a successful completion of the domestic debt exchange program with progress being made on securing international financial support, the government will benefit from macroeconomic stability, larger fiscal space, and new affordable debt service obligations.
“Associated risks and discount factors are expected to then go back to reasonable levels, close to one-digit territory. As such, the new bonds are expected to ensure the maximum recovery possible for the domestic financial sector under our very constrained fiscal and debt situation.”
Ken Ofori Atta
Ken Ofori Atta further advised eligible bondholders seeking to participate to ensure Offer or Exchange Instructions are submitted and received by the CSD before the expiration date.
“Participants (the Depository Participants) are required to forward to the Central Securities Depository (CSD) the collated file containing the information on each Offer or Exchange Instruction received from each holder of Eligible Bonds that expressed interest to participate in the Invitation to Exchange on or before 4:00 p.m.”
Ken Ofori Atta
Kpebu, Simons To File Legal Suit Against Government Over Debt Exchange Program
Despite Ken Ofori Atta’s effort to encourage individuals to participate in the debt exchange program so as to benefit when the program is completed, Mr. Martin Kpebu, a Private Legal Practitioner, is leading about 200 individual investors to engage the government over the inclusion of individual bondholders in the debt exchange program.
According to Mr. Kpebu, these investors do not want any haircut on their matured investments, hence a class action lawsuit against government will follow if negotiations fail.
It would be recalled that days after the government announced the exclusion of pension funds in the debt exchange program, it decided to include individual bondholders.
Individual investors were initially not part of the domestic debt restructuring. However, the exemption of pension funds from the program triggered the inclusion of individual investors.
A notice inviting affected individuals to join the class action suit described the government’s decision as “unconscionable”.
Hence, three groups representing individual bondholders, including Mr. Martin Kpebu and the Vice President of IMANI Ghana, Bright Simons have commenced mobilization to file legal suits against the government for including individual bondholders in the Debt Exchange Program.
