Government has again extended the deadline for domestic investors to register for its domestic debt exchange programme to January 31, 2023.
The extension is to enable government reinforce its engagement with institutional and individual bond holders.
The ministry had previously extended the registration deadline for the domestic debt exchange from the original date of December 19 to 30, 2022.
It was again extended to January 16, 2023 and now to January 31, 2023.
A press release issued by the Ministry of Finance said government had structured the Domestic Debt Exchange Programme as a voluntary exercise, in order to shield domestic bondholders.
“We will, use this period to further engage with stakeholders especially individual bondholders to mitigate any adverse impacts; while we all contribute to overcoming our economic challenges, “ the Ministry said.
The release stated that important discussions were ongoing with financial institutions, notably in relation to forbearance measures, accounting treatment, as well as the structure and parameters of the Ghana Financial Stability Fund.
The Ministry stressed that “a successful Domestic Debt Exchange is critical to advance our economic recovery process, and therefore it is in our common interest to make it work.”
Government announced a domestic debt exchange programme that involves GH₵137.3 billion and suspended interest payment on foreign debt.
Under the original plan, local bonds were to be exchanged for new ones maturing in 2027, 2029, 2032 and 2037, with annual coupons set at 0% in 2023, 5% in 2024 and 10% from 2025 until maturity.
Government later modified the terms including eight additional instruments to be created, bringing the total number of new bonds to 12, with one maturing each year from 2027 to 2038.
Following widespread condemnation of inclusion of pension funds by labour and advocacy groups, government exempted pension funds from the programme.
Despite their initial exemption, individual bondholders have been included in the programme
Individual bondholders are opposed to their inclusion arguing that they will lose about 88.2% of their investments at the current inflation rate.
This, the group said will negatively affect the livelihoods of 1.3 million bondholders and dependents.
Ghana Individual Bondholders Forum, the bondholders will however lose 71% of their investments when discounted at current Treasury Bill rates and 50% when the coupon rates face ‘haircut’.