The Government of Ghana, under the Ministry of Finance, has commenced the process of settling the first coupon payment for bonds impacted by the domestic debt exchange program (DDEP). The matured coupons, totaling GHC 2.4 billion, are set to be settled following instructions from the Ministry.
The DDEP, introduced in 2022, aimed to restructure Ghana’s unsustainable debt burden. The program allowed eligible bondholders to exchange their old bonds for new ones with lower interest rates and extended maturities. The agreed coupon payment for the affected bonds was set at 5%, a reduction from the interest rates of the old bonds.
Initially, there were concerns in the market regarding the government’s ability to fulfill the 5% coupon payment. However, the Ministry of Finance has addressed these concerns, asserting that the settlement of the first coupon payment aligns with the government’s commitment to ensuring the success and credibility of the nation’s domestic debt operations.
The Ministry highlighted that the new bonds issued through the DDEP have become dominant instruments within the domestic bond market. Economist Courage Boti praised the government’s timely payment of the first matured coupons, expressing confidence in the capital market. Boti urged the government to maintain consistency in its actions and to adequately provision for principal payments of bonds.
Source : Citinewsroom