Domestic Debt exchange: deadline extended, terms amended

Government has announced a further extension of its Domestic Debt Exchange expiration date to January 16, 2023.

The terms of the Domestic Debt Exchange have also been amended.

“The Government today announces its decision to extend the Expiration Date of the Invitation from Friday, December 30, 2022, at 4 pm (GMT) to Monday, January 16, 2023, at 4 pm, a statement from Finance Ministry said.

According to the Ministry, the Settlement Date for the Invitation is now expected to occur on Tuesday, January 24, 2023, or as soon as practicable thereafter, but no later than the Longstop Date which is now scheduled for Tuesday, January 31, 2023, unless further extended by government pursuant to the Invitation.

It explained that the Announcement Date is now expected to occur on or about January 17, 2023.

In addition to the foregoing extensions, government also announced modifications to the Invitation to Exchange.

1. Offering accrued and unpaid interest on Eligible Bonds, and a cash tender fee payment to holders of Eligible Bonds maturing in 2023;

1. Increasing the New Bonds offered by adding eight new instruments to the composition of the New Bonds, for a total of 12 New Bonds, one maturing each year starting January 2027 and ending January 2038;
2. Modifying the Exchange Consideration Ratios for each New Bond. The Exchange Consideration Ratio applicable to Eligible Bonds maturing in 2023 will be different than for other Eligible Bonds;
3. Setting a non-binding target minimum level of overall participation of 80% of aggregate principal amount outstanding of Eligible Bonds; and
4. Expanding the type of investors that can participate in the Exchange to now include Individual Investors.

According to the Finance Ministry, these modifications will be set forth fully in an Amended and Restated Exchange Memorandum which is expected to be published during the week of December 26, 2022.

It explained that conforming changes including adding and modifying defined terms in respect of the above amendments and modifications to cure ambiguity, omission, defect, error or inconsistency may be included in the Amended and Restated Exchange Memorandum.

As part of its efforts to address the country’s ongoing economic crisis, on December 5, 2022, government launched a Domestic Debt Exchange.

Pursuant to this, it invited certain holders of approximately ¢137.3 billion of the principal amount outstanding of certain of our domestic notes and bonds issued by the Government, E.S.L.A. Plc or Daakye Trust Plc to exchange their Eligible Bonds for a package of new bonds to be issued by the government.

“The terms and conditions of the Invitation are described in an exchange memorandum available at https://projects.morrowsodali.com/ghanadde.

Capitalised terms used but not defined herein have the meaning ascribed to such terms in the Exchange Memorandum.

Government subsequently announced an extension of the Expiration Date to Friday, December 30, 2022, and the Settlement Date to Friday, January 6, 2023.

As set forth in the Exchange Memorandum, the Government said it “reserves the right in its sole discretion to extend the timetable for the Invitation at any time and to make amendments to the Invitation at any time.

“Any Eligible Holders whose Eligible Bonds are held on its behalf by a broker, dealer, bank, custodian, trust company or other nominees must contact such entity if it wishes to participate in the Invitation, as such entities may establish an earlier deadline to receive instructions to tender Eligible Bonds,” the Finance Ministry said.

It further stated that “In making this decision to extend and the modifications described herein, the Government considered feedback from the financial sector in relation to the need to secure internal approvals.

“Further, this extension affords the Government of Ghana the opportunity to consider suggestions made by all stakeholders with the aim of adjusting certain measures acceptable within the constraints of the Government’s Debt Sustainability Analysis.”