Government has reopened the Domestic Debt Exchange programme to allow holders who could not participate in the previous opening, an opportunity to trade their holdings for a new package.

According to the finance ministry, the terms of the invitation are identical to that of the February 2023 Exchange.

It further indicated that the terms still hold except the relevant dates for the reopening exercise have changed in the Exchange Memorandum.

The ministry further explained that the reopening contemplates a payment of the first coupon on the new instruments as tendered in the February 2023 Exchange to tendering bondholders.

“The Government announced that it is reopening its invitation to the exchange that settled in February 2023, and is therefore once again inviting holders of the domestic notes and bonds of the Republic of Ghana, E.S.L.A. Plc and Daakye Trust Plc to tender their holdings of the Eligible Bonds in exchange for a package of New Tranches of the same new bonds that were issued by the Government as part of the February 2023 Exchange…
“The purpose of this Invitation is to provide those holders who did not participate in either of the Prior Domestic Cedi Exchanges with the opportunity to exchange their Eligible Bonds for New Tranches.”
Finance Ministry

Pursuant to the February 2023 Exchange, the ministry revealed that Government has accepted tenders from a significant majority of the holders of securities which were within the scope of the February 2023 Exchange.

In light of this, it stated that it is aware a number of holders of Eligible Bonds did not participate in the February 2023 Exchange on time and, as a result, were left with their holdings of the Eligible Bonds.

“Mindful of this development, we are proceeding with an administrative reopening of the February 2023 Exchange.”
Finance Ministry

Government assures value for bondholders

Furthermore, the finance ministry reckoned that there is value for bondholders to participate in its Invitation. It elaborated that the new bonds, which will include the new tranches, are expected to be more liquid than the eligible bonds, considering the larger “investment base and the benchmark size” of the new bonds.

“In addition, the Government could under certain circumstances prioritize payments on the new bonds over payment on the eligible bonds.
“Participation in this administrative reopening would also further improve the cashflow position of the Government and further support debt sustainability.”
Finance Ministry

Moreover, the ministry stated that the Invitation is available only to registered holders of Eligible Bonds that are not Pension Funds, except eligible holders have tendered Eligible Bonds in either of the two prior cedi-denominated invitations to exchange by the Government this year.

It however emphasized that bondholders who fail the requirements are not eligible to tender in the invitation and are no longer an Eligible Holder.

Meanwhile, on September 29, 2023, Government will issue the New Tranches to Eligible Holders whose offers are accepted for credit to the account of such Eligible Holder.

As a consequent, the ministry stated that Government reserves the right to extend the Reopening Settlement Date, including with respect to one or more series of Eligible Bonds, without offering Eligible Holders the right to withdraw their offers.

It will be recalled that government launched the Domestic Debt Exchange Program in December 2022 with the hope of restoring Ghana’s capacity to service its debt.

The Finance Minister then revealed that the objective of the Programme was to invite holders of domestic debt to voluntarily exchange approximately GH¢137 billion of the domestic notes and bonds of the Republic, including E.S.L.A. and Daakye bonds, for a package of New Bonds to be issued by government.