International holders of Ghana’s Eurobonds have constituted bondholder creditor committee in response to Ghana’s announcement suspending certain categories of external debt pending an orderly restructuring of the affected obligations.
It includes Eurobonds, commercial loans and most bilateral debt.
The suspension is an interim emergency measure pending future agreements with all relevant creditors.
According to Finance Ministry, the suspension will not include the payments of multilateral debt and new debts whether multilateral or otherwise contracted after December 19, 2022 or debts related to certain short-term trade facilities.
A statement explained that government is evaluating certain specific debts related to projects with the highest socio-economic impact for Ghana which may have to be excluded.
Ghana’s Eurobonds Committee is representative of a diverse group of institutional investors including mutual funds, asset managers, insurance firms, hedge funds, and family offices.
Steering Members of the Committee include the following holders (acting either directly or for and on behalf of the funds or the accounts they manage): Abrdn, Amundi (UK) Limited, BlackRock, Greylock Capital Management, Ninety One.
The Committee has appointed Orrick, Herrington and Sutcliffe LLP as legal advisor and Rothschild and Co as financial advisor.
The Committee is focused on the orderly and comprehensive resolution of Ghana’s debt challenges, recognizing that such resolution will require fair burden-sharing and collaboration among the Ghanaian authorities, private creditors (both domestic and international) and official sector creditors.
According to a statement, the Committee welcomed Ghana’s ongoing engagement with the International Monetary Fund (IMF) and the recent announcement of the Staff Level Agreement.
The Committee notes that a process of good faith negotiation would avoid unilateral actions and would require, inter alia, the timely exchange of detailed economic and financial information among the committee, the Ghanaian authorities and the IMF, and would need to be anchored in reasonably feasible economic adjustment by the Ghanaian authorities.
In this regard, the Committee endorses the Institute of International Finance’s Principles for Stable Capital Flows and Fair Debt Restructuring, which provide meaningful guidance for successful sovereign debt restructurings.
The Committee stands ready for a swift engagement on that basis.
The Committee aims at securing an outcome that is both equitable to creditors and responsive to the economic and social challenges facing Ghana.
A key factor in measuring the success of Ghana’s debt resolution would be the timely restoration of international market access, which remains critical for Ghana to meet its development objectives.
Holders of the Eurobonds interested in receiving more information are encouraged to contact ghana.bondholders@rothschildandco.com or tlaryea@orrick.com (+ 1 (202) 255 8902).
