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Joe Jackson, Director of Operations at Dalex Finance, believes that another delay of the deadline for the domestic debt exchange program will allow for some finalized agreements with program subscribers.
After multiple extensions, the deadline for the Domestic Debt Exchange (DDE) Program is set to expire today, Tuesday, January 31, 2023.
Given the recent deals achieved with groupings of individual bondholders and actors in the banking and insurance industries, stakeholders are looking forward to the government's next action.
"Even if the deadline is today," those who must make a decision do not have the terms to finalize. So it will be out [today]. If it occurs, there will be little time for final assessment. The devil is always in the particulars. I believe the deadline should be extended by a few days."
The government achieved an agreement with the Ghana Securities Industry Association, Ghana Insurers Association, and Ghana Association of Banks on the terms of participation in the DDE.
Bondholders will now get a 5% coupon in 2023, rather than the zero percent that was previously promised.
Individual bondholders would be afforded any increased commercial conditions agreed with, or exemptions granted to, collective Investment Schemes (CIS) and people who hold bonds in Trust Accounts with Securities and Exchange Commission (SEC) recognized businesses.
There is also clarification on the operational structure and conditions of access to the Ghana Financial Stability Fund, as well as the elimination or alteration of any elements in the Exchange Memorandum that allow the Republic to adjust the terms of the Exchange at its exclusive discretion.
Individual bondholder organizations have proposed fiscal modifications, including the sale of 17 State-owned firms that are loss-making, bankrupt, or in difficulty.
Despite the government's poor circumstances, Joe Jackson believes that individual bondholders will be shielded from the debt swap.
"The government can get by without individual bondholders. It made the choice and found a diplomatic method to exclude particular bondholders by stating that it would prefer them to sign on but would not default if they do not. The government must be pragmatic and make the difficult decision to decrease spending, as we have advised, but it will be difficult."
Individual bondholders would benefit from any improved commercial terms agreed upon or exemptions provided to collective investment schemes (CIS) and individuals who own bonds in Trust Accounts with Securities and Exchange Commission (SEC)-registered enterprises.
There is also clarity on the operational structure and terms of access to the Ghana Financial Stability Fund, as well as the removal or modification of any aspects in the Exchange Memorandum that allow the Republic to amend the terms of the Exchange at its exclusive discretion.