The Communications Director of the New Patriotic Party, Richard Ahiagba has indicated that raising of Ghana’s Domestic Currency sovereign rating to CCC/C+ from selective Default by the credit rating agency S&P gives an indication that the economy is on the path of recovery.
Mr Ahiagba who made this statement yesterday on his official twitter handle further urged the good people of Ghana to help the government of President Akufo Addo to build the nation together. “S&P has raised Ghana’s domestic currency sovereign rating to CCC/C+ from Selective Default. Great commendations to bondholders & Ghanaians who, despite the politics & fear of the unknown, participated in the exchange. Now, let’s build forward together!
The rating on Ghana’s local-currency debt was upgraded by S&P Global Ratings as the country settled its domestic debt exchange with bondholders a statement from S&P noted
. Ghana’s local credit score was raised to CCC+ from SD — or selective default — by S&P after new domestic debt securities were delivered to creditors. “We understand that the authorities aim to lower debt to GDP to about 55% over a five-year horizon,” they wrote. “Discussions with holders of foreign currency instruments are continuing.”
Ghana has been engaging investors since late last year to restructure about $30 billion of its $46 billion in local and international debt.
It recently completed the first part of a domestic restructuring, with investors exchanging 83 billion cedis ($6.7 billion), or 64% of holdings, for new securities, against an overall target of 80%. It aims to start “substantive” discussions with international bondholders and their advisers in the coming weeks, Minister of Finance Ken Ofori-Atta said Thursday.
Still, the ongoing discussion means payments have been halted on individual bonds. S&P on Friday lowered the ratings on three UK-law Eurobonds — maturing in 2023, 2027 and 2025 — to D, or default.
Meanwhile, a statement from the Ministry of Finance acknowledged the completion of the DDEP with a successful delivery of new securities to bondholders and indicated that “. In doing so, the selective default is substantially cured”. The Finance Ministry said payment of coupons and principals in respect of the Domestic Debt Exchange Programme (DDEP) would start on March 13, 2023 and further stated that it only applies to old bondholders who did not sign up for the DDEP.
READ FULL STATEMENT
FOR: IMMEDIATE RELEASE
DOMESTIC DEBT EXCHANGE PROGRAMME (DDEP) UPDATES
Accra, Ghana, 27th February 2023 … Following the successful settlement and conclusion of Ghana’s Domestic Debt Exchange Programme (DDEP) the Government announces the following developments:
Firstly, the newly issued bonds have been settled and listed and will become the new benchmark bonds for the fixed income market. The Ministry of Finance will work with relevant stakeholders, as agreed, to ensure that these new benchmark securities become the basis for deepening the domestic sovereign bond market.
Secondly, in fulfillment of the assurance given by Government to bond holders who did not tender, the Ministry is taking administrative steps to ensure that payments of coupons and principals of the old bonds resumes by 13th March, 2023.
iii. Thirdly, on Friday, 24th February 2023, S&P Global Ratings raised Ghana’s local currency sovereign credit ratings from selective default (SD) to ‘CCC+/C’. This acknowledges the completion of the DDEP with a successful delivery of new securities to bondholders. In doing so, the selective default is substantially cured.
The above stated milestone is further expected to accelerate the engagement with our external creditors. The Government of Ghana also takes this opportunity to assure our external creditors of their equal importance to the Republic of Ghana. We will, therefore, continue to work together to advance the progress of our external debt treatment, in order to ensure Ghana’s longterm macroeconomic stability. END