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Ghana advances in restructuring international bonds

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Ghana has successfully navigated a crucial phase in restructuring its international bonds, with official creditors confirming that the proposed debt rework is fair to bondholders.

“The Ministry of Finance has received formal confirmation from its Official Creditor Committee (OCC) that the Agreement in Principle reached with Eurobond holders’ representatives aligns with the Comparability of Treatment principle,” stated Ghana’s finance ministry on Monday.

This principle, originating from the Paris Club of wealthy creditor nations, ensures that its members do not offer disproportionate concessions compared to private lenders or others outside the group.

A spokesperson for the Paris Club confirmed that the OCC found Ghana’s bond restructuring deal provided equitable treatment to various types of creditors.

Leeuwner Esterhuysen, an economist at Oxford Economics Africa, noted that this approval from official creditors paves the way for Ghana to issue new bonds to investors, replacing the ones being restructured.

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“The country aims to begin the bond exchange this month and conclude it by the end of September,” he said.

In January, Ghana reached a deal to restructure $5.4 billion of loans with its Official Creditor Committee, which includes China and France as co-chairs. T

The country also secured an agreement in principle with two bondholder groups in late June to restructure approximately $13 billion of its international bonds, following Zambia as the second African nation in recent weeks to reach the final stages of a debt overhaul.

The government now needs to ask all its bondholders to vote on the proposed deal, which, if confirmed, will finalize the debt restructuring process. Ghana, a leading gold and cocoa producer in West Africa, defaulted on most of its $30 billion in external debt in 2022.

The default followed the exacerbation of its financial situation due to the COVID-19 pandemic, the war in Ukraine, and rising global interest rates, all of which compounded years of excessive borrowing.

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