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Domestic Debt Exchange deadline extended again to January 31

Government has further extended the deadline to register for its domestic debt exchange programme to January 31, 2023.

The extension is enable government further engagement with institutional and individual bond holders.

The ministry had previously extended the registration deadline for the domestic debt exchange from the original date of December 19 to 30, 2022.

It was again extended to January 16, 2023 and now to January 31, 2023.

The Ministry of Finance which announced the extension on its Twitter account said consensus is key to a successful economic recovery.

Government announced a domestic debt exchange programme that involves GH₵137.3 billion and suspended interest payment on foreign debt.

Under the original plan, local bonds were to be exchanged for new ones maturing in 2027, 2029, 2032 and 2037, with annual coupons set at 0% in 2023, 5% in 2024 and 10% from 2025 until maturity.

Government later modified the terms including eight additional instruments to be created, bringing the total number of new bonds to 12, with one maturing each year from 2027 to 2038.

Following widespread condemnation of  inclusion of pension funds by labour and advocacy groups, government exempted pension funds from the programme.

Despite their initial exemption, individual bondholders have been included  in the programme

Individual bondholders are opposed to their inclusion arguing that they will lose about 88.2% of their investments at the current inflation rate.

This, the group said will negatively affect the livelihoods of 1.3 million bondholders and dependents.

Ghana Individual Bondholders Forum, the bondholders will however lose 71% of their investments when discounted at current Treasury Bill rates and 50% when the coupon rates face ‘haircut’.

The Forum explained that direct individual bondholding and holdings through collective investment schemes stand at about GH₵15.5 billion, representing about 11% of the eligible bonds and the capitalized interest.

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