The Government of Ghana has reached an agreement with banks to restructure ¢15 billion ($1.36 billion) of locally issued U.S. dollar bonds and cocoa bills, three sources close to the negotiations have told Reuters.

The West African nation is seeking new terms for the restructuring of its domestic debt by the end of June to be able to meet an International Monetary Fund (IMF) deadline, and focus attention on negotiations with external creditors.

Ghana concluded the first phase of its domestic debt exchange in February 2023, with 85% of eligible bondholders participating, but needs new terms for another ¢123 billion ($11.18 billion) to qualify for the next tranche of a $3 billion IMF loan to address its worst economic crisis in a generation.

The debt comprises domestic dollar bonds, cocoa bills, pension funds and debt owed the central bank. Cocoa bills are securities issued to meet the short-term liquidity needs of the country's cocoa regulator Cocobod.

The sources, two in the Finance Ministry and one at a bank that holds some of the bonds, said the government and the lenders have agreed to convert ¢6.9 billion Ghana worth of domestic U.S. dollar bonds into two term loans with new lower rates.

Another ¢8.1 billion worth of cocoa bills will be converted into a new bond at 12% yield, although some banks are holding out for 13%, a banking source said.

The last cocoa bill issued in February 2023 had a yield of 32.22%.