Ghana has reportedly reached an agreement in principle with its Eurobond holders for the restructuring of approximately $13 billion worth of international debt, according to sources cited by Reuters on Thursday.
This follows a recent deal finalized with official creditors earlier in the month.
Under the terms of the agreement, bondholders are expected to accept a haircut on the principal of up to 37%, with the maturity of the bonds being extended, as revealed by two of the sources familiar with the matter.
Ghana, like several other nations, faced economic challenges exacerbated by the COVID-19 pandemic, the conflict in Ukraine, and increased global interest rates, leading to a default on a significant portion of its $30 billion external debt in 2022.
Similar to Zambia, Ghana engaged in debt restructuring discussions under the G20 Common Framework, aimed at facilitating expedited debt overhauls and involving key bilateral lenders such as China.
According to one source close to the negotiations, an official announcement regarding the deal is anticipated by next week, while two other sources suggested it could come as early as Friday. The Ghanaian finance ministry and the Paris Club, an alliance of creditor nations, were not immediately available for comment.
Formal talks between Ghana and two groups of bondholders commenced in mid-March, involving Western asset managers, hedge funds, and regional African banks.
However, negotiations hit a roadblock in April after the proposed deal failed to meet the requirements of the International Monetary Fund’s (IMF) debt sustainability analysis.
Both parties regrouped to find a revised solution, aligning with a revised IMF debt framework on Ghana that was shared with bondholders earlier.
Ghana, the world’s second-largest cocoa producer, had earlier reached an agreement with its official creditor committee in January, paving the way for a formalized debt restructuring deal.
This agreement outlines laid the groundwork for an upcoming meeting of the IMF executive board on June 28 to consider a second review of Ghana’s $3 billion loan, a three-year package, and the release of the next tranche amounting to $360 million.