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You are on your own – John Kumah tells bondholders who reject debt exchange programme

The Deputy Finance Minister, Dr John Kumah has advised bondholders to comply with the government’s debt exchange programme.

Speaking in an interview on JoyNews’ PM Express on Monday, Dr Kumah stated that institutional bondholders who reject the programme will have themselves to blame.

“..then you don’t get the carrots, the benefits, the buffers that have been provided then you are on your own. It means that you are open to default in terms of if the market is unable to redeem,” he told JoyNews’ Evans Mensah.

According to him, interested bondholders have a 10-day period starting from Monday, December 5, 2022, to sign on to the programme.

Government on December 5, 2022, announced a debt restructuring measure.

According to Finance Minister, Ken Ofori-Atta, the objective is “to invite holders of domestic debt to voluntarily exchange approximately ¢137 billion of the domestic notes and bonds of the Republic, including E.S.L.A. and Daakye bonds, for a package of New Bonds to be issued by the Republic.”

Bondholders like pension funds, banks and insurance firms will have to exchange their bonds for one that will earn zero interest next year.

The new bonds will only begin to earn five per cent interest in 2024 and 10 per cent for the remainder of their tenure. The maturity dates have also been extended with the first bonds only maturing in 2027.

However, some of the institutions such as the Trade Union Congress, Ghana Medical Association, the Chamber of Corporate Trustees of Ghana among others have already rejected the offer.

Dr. Kumah said the debt restructuring programme is the way to salvage the economy.

He added that government will continue to engage the stakeholders “for them to be rest assured that we stand to gain better together than to fight over this matter.”

Meanwhile, Deputy Ranking Member on the Finance Committee, Isaac Adongo says bondholders who will be affected by the domestic debt restructuring should sue government to enforce their rights.

According to him, the debt exchange programme is not from the government but from the Finance Minister, Ken Ofori-Atta therefore the need to take action.“We are ready with my team to support any group of investors and bondholders who agree to come together for a class action to sue the Minister for Finance and government to reverse this decision.

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