(Bloomberg) — Ghana’s debt revamp deal with eurobond holders has won the approval of the official creditor committee.
The committee, representing the country’s bilateral lenders, communicated their endorsement to the government, the Ministry of Finance said in a statement on Monday.
“The ministry is pleased to announce that it has received a formal confirmation from its official creditor committee that the agreement in principle reached with representatives of eurobond holders is consistent with the comparability of treatment principle,” the ministry said.
The country’s dollar bonds traded relatively unchanged on Monday.
Ghana and investors last month reached a pact to rework $13 billion of dollar bonds. The deal needed the blessing of the official creditors because of the comparability of treatment principle of the Group of 20’s Common Framework.
The approach, deployed by Ghana and others including Ethiopia and Zambia for their debt revamp, aims to ensure that payment losses in the process are reasonably shared between bilateral and private creditors.
The accord with bondholders cancels $4.7 billion of Ghana’s debt and in addition provides $4.4 billion of debt service relief. The pact with official creditors reached in June that reworked $5.1 billion loans provided $2.8 billion debt service savings.
The consent from the official creditor committee paves the way for the West African nation to round up the process of restructuring by issuing new bonds to investors to replace the existing ones.
The country’s target is to begin the debt exchange program this month and conclude it by end-September.
Ghana started the journey to reorganize almost all of its obligations in December 2022 as part of conditions to qualify for a $3 billion International Monetary Fund program. Its progress has been hailed as one of the quickest – it took Zambia almost four years to issue new instruments to bondholders.
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(Updates with comment from finance ministry in third paragraph.)
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