Ghana, Eurobond holders agree 37% nominal haircut

Ghana has reached an agreement in principle with Eurobond investors to restructure approximately $13 billion of its dollar bonds, marking a significant milestone in resolving the country’s debt crisis.
The agreement, which involves a 37% effective nominal haircut—an increase from the initial 33% offer—aligns with the International Monetary Fund’s (IMF) program parameters for Ghana’s three-year Extended Credit Facility (ECF).
Sources indicate that the Official Creditor’s Committee (OCC) is expected to confirm that the requirements for comparable treatment have been met, with official confirmation anticipated at the next IMF Board Meeting later this month.
This development completes a three-step debt restructuring process that commenced in December 2022.
Remarkably, Ghana has expedited this process faster than Zambia, demonstrating its commitment to addressing its debt challenges.
The agreement outlines have paved the way for the IMF executive board to hold a June 28 meeting to consider a second review of Ghana’s $3 billion loan and the release of the next tranche of $360 million.
Negotiations with international investors holding about 40% of Ghana’s $13 billion of defaulted Eurobonds began in mid-March and resulted in an interim deal.
Initially, these bondholders had agreed to a 33% effective nominal haircut and had backed down on the inclusion of value-recovery instruments, which would have tied interest payments to the country’s future economic growth.
However, the IMF noted that the “working scenario” presented by the Ghanaian government requires further consideration to fully align with the debt sustainability agreement between the IMF and Ghana.
This agreement signifies a crucial step towards stabilizing Ghana’s economy and securing the financial support necessary to implement its economic recovery plan.