Government is expected to launch the Debt Exchange programme announced in the 2023 budget today, December 5, 2022.
This comes on the heels of the conclusion of the broad contours of the debt sustainability analysis as part of the debt restructuring deal with the International Monetary Fund(IMF).
The debt operation is part of a comprehensive set of measures for reducing the present value of public debt to Gross Domestic Product (GDP) ratio to, at least, 55 percent in the medium term by offering an effective cap on interest payments on public debt.
Domestic Debt Exchange
Government has announced the modalities of a domestic debt exchange following the conclusion of Debt Sustainability Analysis as part of negotiations with the International Monetary Fund(IMF).
In line with the programme, domestic bondholders are billed to exchange their instruments for new ones, Finance Minister Ken Ofori-Atta said in a televised announcement on Sunday.
According to him, existing domestic bonds as of 1st December 2022, will be exchanged for a set of four new bonds maturing in 2027, 2029, 2032, 2037.
“The annual coupon on all of these new bonds will be set at 0% in 2023, 5% in 2024, and 10% from 2025 until maturity. Coupon payments will be semi-annual,” said the Finance Minister.
Meanwhile, the Finance Minister stressed “There will be NO haircut on the principal of bonds, adding Individual holders of bonds will not be affected.
Also, Treasury Bills were exempted from the haircut as holders will be paid the full value of their investments on maturity.
However, the external debt restructuring parameters will be presented in due course, Mr Ofori-Atta said.