The Government of Ghana is not likely to pay a ¢4.185 billion 5-year bond maturing today, February 6, 2023.

This is because it has already been included in the 2nd Amended and Restated Exchange Memorandum of the Domestic Debt Exchange Programme (DDEP).

However, it is unclear whether the government will honour the interest payment of the debt instrument. Ideally, the government would have roll-over the instrument, but market conditions make it unlikely to do so.

Some market analysts and traders have told Joy Business on condition of anonymity that the government will not honour its obligation as stated in the memorandum of the DDEP.

The memorandum stated that “Eligible Holders holding Eligible Bonds maturing on or prior to the Settlement Date (including, without limitation, any extension of the Settlement Date) (each such Eligible Bonds, a “Maturing Eligible Bond”) will not receive a final interest payment (except for Accrued Interest Payable for tendering holders as described below) and a final principal payment (regardless of whether an Eligible Holder has tendered or not) on such Maturing Eligible Bonds.”

It added that “Offers or Exchange Instructions in respect of Maturing Eligible Bonds made after their maturity date but prior to the Settlement Date will be, and those made prior to such maturity date will remain, valid, and the Republic [Ghana] will treat Maturing Eligible Bonds in respect of such Offers or Exchange Instructions as still outstanding for purposes of the Invitation to Exchange.”

The memorandum added that Eligible Holders holding Eligible Bonds ncluding Maturing Eligible Bonds in respect of which an interest payment date will occur prior to the Settlement Date will not receive payment of such accrued and unpaid interest on the usual interest payment date.

Instead, it pointed out that any accrued and unpaid interest on validly tendered Eligible Bonds including Maturing Eligible Bonds as of the Settlement Date (and in the case of Eligible Maturing Bonds, as of their maturity date) will be considered for purposes of calculating applicable Accrued Interest Payable.  

A similar situation is expected to occur when a 2-year note to the tune of 3.406 billion maturing on February 20, 2023.