International holders of Ghana’s Eurobonds have formed a committee to see to the orderly and comprehensive resolution of Ghana’s debt challenges.
The Committee represents a diverse group of institutional investors including mutual funds, asset managers, insurance firms, hedge funds, and family offices.
This follows Monday’s announcement by the Government of Ghana suspending all debt service payments for some of its external debt, including the payments on Eurobonds, commercial term loans, and mostbilateral debts.
The exercise forms part of the Government’s effort to restructure its debt for the Management and Executive Board’s approval for a $3billion International Monetary Fund (IMF) support programme to restore macroeconomic stability amid the current economic hardship.
A statement issued by the Bondholders said the steering members of the committee will include Abrdn, Amundi (UK) Limited, BlackRock, Greylock Capital Management and Ninety One.
“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.”
The statement therefore noted that the Committee is ready for a swift engagement with the Ghanaian authorities to ensure a successful debt restructuring.
Ghana had already announced a domestic debt exchange programme, which is facing intense resistance on the labour front.
The IMF has said a comprehensive debt restructuring is a condition of its support.
“The Government stands ready to engage in discussions with all of its external creditors to make Ghana’s debt sustainable through a fair, transparent and comprehensive debt restructuring exercise in line with international best practices,” the Ministry of Finance said in a press release on Monday.
Read also: Government announces suspension of some external debts
Below is the full statement by the Committee
Ghana Euro Bondholders Form Representative Committee
Following the public statements by the Government of Ghana of its intention to seek a restructuring of its external debt, international holders of Ghana’s Eurobonds have organized to form a bondholder creditor committee (the “Committee”). The 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 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.
The Committee welcomes the authorities’ ongoing engagement with the International Monetary Fund (the “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.
The Committee has appointed Orrick, Herrington & Sutcliffe LLP as legal advisor and Rothschild & Co as
financial advisor