Ghana extends domestic debt exchange deadline again to Feb. 7
Adds investor comment, bond details
By Cooper Inveen
ACCRA, Jan 31 (Reuters) -Ghana has extended the deadline to register for its domestic debt exchange programme for a fourth time to Feb. 7 to allow for new agreed terms to be finalised and finish discussions with other bondholders, the finance ministry said on Tuesday.
The West African nation started this debt swap plan at the beginning of December as part of a plan to redress a spiralling economic crisis blighting the gold, cocoa and oil producer.
Days later, the International Monetary Fund reached a staff-level agreement with Ghana for a $3 billion rescue package that will only be approved with comprehensive debt restructuring.
"The new terms of the exchange have been accepted," the ministry said, referring to agreements reached with associations representing banks, insurers and capital market operators last week.
A revised, final exchange memorandum will be released by Feb. 2, it said, and a new settlement date of Feb. 14 will be confirmed in the new memorandum.
Ghana's government has struggled to convince bondholders to register for the debt exchange programme, in part due to lack of clarity over its terms and concerns about profitability. In mid-January, Ghana extended the deadline to Jan. 31.
In the announcement of the latest extension, the finance ministry said individual bondholders would be offered new bonds with a maximum maturity of five years instead of 12 and confirmed that they are free not to participate in the swap.
Those below the age of 59 are being offered a 10% coupon rate, while retirees, including those retiring in 2023, have been offered 15%.
Discussions with pension funds, which are getting a different deal, are continuing, the ministry said.
Ghana also needs to negotiate the restructuring of external debt, including $13 billion of international Eurobonds and $4 billion in bilateral loans, according to International Institute of Finance data.
"As long as the domestic debt deal isn't agreed, it is hard for the IMF to have a more solid set of numbers to plug into their Debt Sustainability Analysis and for other creditors' committees – official creditors, bondholders - to really get to work," said Giulia Pellegrini, an emerging market debt portfolio manager at Allianz Global Investors.
"This potentially ends up penalising Ghana - its ability to put this debt default behind itself and re-approach markets in the future," Pellegrini said.
Reporting by Cooper Inveen;
Additional reporting by Karin Strohecker in London
Writing by Sofia Christensen and Rachel Savage;
Editing by James Macharia Chege and Grant McCool
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