ACCRA,
Ghana, June 24, 2024 /PRNewswire/ -- The
Government of the Republic of Ghana (the "Government"), advised by
Lazard Frères and Hogan Lovells, acting respectively as financial
and legal advisors, is pleased to announce that it has reached an
Agreement in Principle ("AIP") with the members of the
Steering Committee (the "International Steering Committee")
of the Ad Hoc Creditor Committee of International Bondholders (the
"International Committee"), advised by Rothschild & Cie
and Orrick, Herrington & Sutcliffe LLP and with members of the
Steering Committee (the "Regional Steering Committee" and,
together with the International Steering Committee, the
"Steering Committees") of the Creditor Committee of Regional
Bondholders (the "Regional Committee"), advised by
Renaissance Capital Africa regarding the potential treatment of the
Republic of Ghana's Eurobonds (the
"Bonds")1. The members of the International
Committee currently own or control approximately 40% of the
outstanding Bonds. The members of the Regional Steering Committee
and all the members of the Regional Committee currently jointly own
or control approximately 15% of the outstanding Bonds.
Over the past week, the Government and representatives of the
two Steering Committees held consultations with the International
Monetary Fund (the "IMF") Staff and the Official Creditor
Committee for Ghana (the
"OCC"). The IMF Staff has confirmed that the AIP is
compatible with program parameters in the context of the IMF's
second review of Ghana's
three-year program under the Extended Credit Facility, given the
authorities' restructuring strategy for the other commercial
creditors and assuming that the comparability of treatment
requirements would be confirmed as met by the OCC. This assessment
will have to be officially confirmed following the next IMF Board
Meeting this month for the approval of the second review. The OCC
co-Chairs welcome the progress made between Ghana and the Steering Committees with an
agreement-in-principle. Based on the preliminary analysis of the
Secretariat of the OCC, the co-Chairs consider that this
agreement-in-principle is a good basis for a consultation of the
OCC members, in order to provide promptly the collective assessment
of the OCC regarding the Comparability of Treatment principle.
The AIP contemplates a consent solicitation process to amend the
Bonds and an exchange offer for new series of bonds as described in
Annex A. The AIP entails important concessions from bondholders,
while providing the required debt relief to the Government. Under
the AIP, Bondholders would forego approximately $4.7 billion of their claims and provide cash
flow relief of approximately $4.4
billion during the IMF program period. These concessions are
necessary given the constraints faced by the Republic of
Ghana and are essential to achieve
the debt relief required to restore debt sustainability to the
country as assessed under the Joint IMF/WB LIC DSF.
The agreement with the Steering Committees also includes certain
non-financial terms of the new bonds such as a most-favored
creditor clause that will require the Government to ensure certain
other creditors do not receive better net present value terms, and
an obligation on the part of Ghana
to publish certain public debt information on a semi-annual basis.
Additional non-financial provisions in the AIP include loss
reinstatement until 2032 upon certain events, an estoppel provision
that precludes the Government of Ghana from raising legal challenges to the new
bonds and liquidated damages (based upon the loss reinstatement
measure) in the event of a Ghana Supreme Court ruling of invalidity
of the new bonds under Ghanaian law.
The formal launch of the consent solicitation is expected in the
upcoming weeks, subject to agreement on definitive documentation.
In accordance with the terms of the existing bond documentation,
the Government will seek the required approvals and support of the
broader bondholder community in order to successfully consummate
this important transaction.
Annex A. Financial terms of the AIP
All holders have the choice between the PAR and DISCO option,
up to a limit of US$ 1,600m for the
PAR option. In case a consenting holder chooses the DISCO option,
such consenting holder would receive 3 new instruments (Bond Short,
Bond Long and Down Payment Bond). Otherwise, such consenting holder
would receive a Par Bond.
In addition to that, any consenting holder (under both
options) would receive a PDI bond and a consent fee.
If required, the Republic of Ghana and the Steering Committees may choose
to discuss potential amendments to the structure of the new
instruments under the condition that the agreed set of cashflows
underlying the AIP (see Annex B) remains completely
unchanged.
Agreement in
Principle
|
|
|
DISCO
OPTION
|
Cap
|
No cap
|
|
|
Consent
fee
(for US$ 1,000
original face value)
|
$ 10
|
|
|
|
Bond
short
|
Bond
long
|
Down Payment
Bond
|
PDI
Bond
|
Amount
(for US$ 1,000
initial face value)
|
$ 242
|
$ 348
|
$ 40
|
Accrued amount until
31/12/2023
37% nominal
haircut
|
Terms of the
"exit
instrument"
|
Interest
rate
|
5.00% (accruing from
01/01/2024) until 01/07/2028
6.00%
afterwards
|
0 %
|
0 %
|
Maturity
|
July 2029
|
July
20351
|
July 2026
|
Jan. 2030
|
First
instalment
|
Jan. 2026
|
Jan.
20301
|
July 2024
|
July 2024
|
Effective nominal
haircut
|
37 %
|
37 %
|
Note: (1) First 10
semi-annual instalments representing c. 7.8% of principal, and last
2 instalments representing c. 11.0% of principal.
|
|
|
PAR
OPTION
|
Cap
|
US$ 1,600m
|
|
|
Consent
fee
(for US$ 1,000
original face value)
|
$ 10
|
|
|
|
Bond
Par
|
Down Payment
Bond
|
PDI
Bond
|
Amount
(for US$ 1,000
initial face value)
|
$ 960
|
$ 40
|
Accrued amount until
31/12/2023
37% nominal
haircut
|
Terms of the
"exit
instrument"
|
Interest
rate
|
1.50 %
|
0 %
|
0 %
|
Maturity
|
Jan. 2037
|
July 2026
|
Jan. 2030
|
First
instalment
|
Jan. 2036
|
July 2024
|
July 2024
|
Effective nominal
haircut
|
0 %
|
37 %
|
|
(1) For the ISIN
XS2325742166 (GHANA 04/2025 0.00%) the recognized face value for
the ISIN XS2325742166 (GHANA 04/2025 0.00%)
("2025s Face Value") is equal to the initial proceeds at
issuance date plus the accrued interests at the implicit yield at
issuance of 6.309%
until [31/12/2023]
(2) For ISIN
XS1297557412 (GHANA 10/2030 10.75%), the World Bank Partially
Guaranteed Bond will be subject to the following
expected treatment: (i) subject to the confirmation from the World
Bank, the World Bank would be expected to terminate its obligation
under
the guarantee by making a cash payment within [x] days after the
Settlement date to 2030 Holders equivalent to the present value
of the expected remaining cash payments under the guarantee between
14-Oct-24 and 14-Oct-26, (ii) the outstanding nominal claim would
be
subject to the same terms as all other Eurobonds. It is expected
that the advisors of the bondholders and of the Authorities will
work together
with the World Bank Staff to discuss the agreed solution and ensure
its executability.
|
Annex B. Cashflows of the
AIP
The table below presents the cashflows under the AIP
expressed in US$m and assuming a 100 percent exchange of all 13.1bn
of original face value of existing Eurobonds as listed in Annex C.
It is also assumed that the cap on the PAR option is
reached.
|
|
|
2024
|
2025
|
2026
|
2027
|
2028
|
2029
|
2030
|
2031
|
2032
|
2033
|
2034
|
2035
|
2036
|
2037
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
477
|
692
|
1,377
|
1,133
|
1,099
|
1,109
|
937
|
838
|
801
|
763
|
726
|
942
|
1,043
|
516
|
Total
Cashflows
|
|
Principal
|
166
|
331
|
1,025
|
816
|
816
|
816
|
683
|
622
|
622
|
622
|
622
|
879
|
1,024
|
512
|
|
|
Interests
|
311
|
361
|
353
|
318
|
283
|
294
|
253
|
216
|
178
|
141
|
104
|
63
|
19
|
4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
28
|
23
|
23
|
23
|
23
|
23
|
23
|
23
|
23
|
23
|
23
|
23
|
1,043
|
516
|
Bond Par
|
|
Principal
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
1,024
|
512
|
|
|
Interests
|
28
|
23
|
23
|
23
|
23
|
23
|
23
|
23
|
23
|
23
|
23
|
23
|
19
|
4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
116
|
139
|
823
|
789
|
754
|
724
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
Bond Short
|
|
Principal
|
-
|
-
|
693
|
693
|
693
|
693
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|
|
Interests
|
116
|
139
|
130
|
95
|
61
|
31
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
167
|
200
|
200
|
200
|
200
|
239
|
852
|
815
|
778
|
740
|
703
|
919
|
-
|
-
|
Bond Long
|
|
Principal
|
-
|
-
|
-
|
-
|
-
|
-
|
622
|
622
|
622
|
622
|
622
|
879
|
-
|
-
|
|
|
Interests
|
167
|
200
|
200
|
200
|
200
|
239
|
230
|
193
|
155
|
118
|
81
|
40
|
-
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
61
|
122
|
122
|
122
|
122
|
122
|
61
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
PDI Bond
|
|
Principal
|
61
|
122
|
122
|
122
|
122
|
122
|
61
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|
|
Interests
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
105
|
209
|
209
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
Down Payment
Bond
|
|
Principal
|
105
|
209
|
209
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|
|
Interests
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
Annex C. List of ISINs
ISIN
|
Description
|
XS0956935398
|
GHANA Aug-23
7.88%
|
XS2325742166
|
GHANA Apr-25
0.00%
|
XS1108847531
|
GHANA Jan-26
8.13%
|
XS2115122538
|
GHANA Feb-27
6.38%
|
XS1968714110
|
GHANA Mar-27
7.88%
|
XS2325748106
|
GHANA Apr-29
7.75%
|
XS1821416234
|
GHANA May-29
7.63%
|
XS1297557412
|
GHANA Oct-30
10.75%
|
XS1968714540
|
GHANA Mar-32
8.13%
|
XS2325747397
|
GHANA Apr-34
8.63%
|
XS2115141751
|
GHANA Feb-35
7.88%
|
XS2325747637
|
GHANA May-42
8.88%
|
XS1821416408
|
GHANA Jun-49
8.63%
|
XS1968714623
|
GHANA Mar-51
8.95%
|
XS2115147287
|
GHANA Mar-61
8.75%
|
This press release does not constitute an offer of securities
for sale in the United States, and
the securities (if issued) will not be registered under the U.S.
Securities Act of 1933, as amended (the "Securities Act") or the
securities laws of any state of the
United States and they may not be offered or sold within
the United States, except pursuant
to an exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act and applicable
state or local securities laws. This press release does not
constitute an offer of securities for sale, or the solicitation of
an offer to buy any securities, in any state or other jurisdiction
in which any offer, solicitation or sale (if made) would be
unlawful. Any person considering making an investment decision
relating to any securities must inform itself independently based
solely on an offering memorandum to be provided to eligible
investors in the future in connection with any such securities
before taking any such investment decision.
This announcement is directed only to beneficial owners of the
Government's bonds who are (A) "qualified institutional buyers"
within the meaning of Rule 144A under the Securities Act or (B)
outside the United States in
offshore transactions in compliance with Regulation S under the
Securities Act, that may lawfully participate in the Restructuring
in compliance with applicable laws of applicable jurisdictions.
No offer of any kind is being made to any beneficial owner of
bonds who does not meet the above criteria or any other beneficial
owner located in a jurisdiction where the offer would not be
permitted by law.
Forward-Looking Statements
All statements in this press release, other than statements of
historical fact, are forward-looking statements. These statements
are based on expectations and assumptions on the date of this press
release and are subject to numerous risks and uncertainties which
could cause actual results to differ materially from those
described in the forward-looking statements. Risks and
uncertainties include, but are not limited to, market conditions
and factors over which the Government has no control. The
Government assumes no obligation to update these forward-looking
statements and does not intend to do so, unless otherwise required
by law.
Notice to Investors in the European Economic Area and the
United Kingdom
Notice to EEA retail investors. The announcement
contained in this press release is not being directed to any retail
investors in the European Economic Area ("EEA"). As a result,
no "offer" of new securities is being made to retail investors in
the EEA.
This announcement is only directed to beneficial owners of Bonds
who are within a Member State of the European Economic Area or the
United Kingdom (each, a "Relevant
State") if they are "qualified investors" as defined in Regulation
(EU) 2017/1129 (as amended or superseded, the "Prospectus
Regulation").
The securities are not intended to be offered, sold, or
otherwise made available to and should not be offered, sold or
otherwise made available to any retail investor in a Relevant
State. For these purposes, a "retail investor" means a person who
is one (or more) of: (i) a retail client as defined in point (11)
of Article 4(1) of Directive 2014/65/EU (as amended, "MiFID II");
(ii) a customer within the meaning of Directive (EU) 2016/97 (as
amended), where that customer would not qualify as a professional
client as defined in point (10) of Article 4(1) of MiFID II; or
(iii) not a qualified investor as defined in the Prospectus
Regulation. Consequently, no key information document required by
Regulation (EU) No 1286/2014 (as amended, the "PRIIPs Regulation")
for offering or selling securities or otherwise making them
available to retail investors in a Relevant State has been prepared
and therefore offering or selling securities or otherwise making
them available to any retail investor in a Relevant State may be
unlawful under the PRIIPs Regulation. References to Regulations or
Directives include, in relation to the UK, those Regulations or
Directives as they form part of UK domestic law by virtue of the
European Union (Withdrawal) Act 2018 or have been implemented in UK
domestic law, as appropriate.
United Kingdom
For the purposes of section 21 of the Financial Services and
Markets Act 2000, to the extent that this announcement constitutes
an invitation or inducement to engage in investment activity, such
communication falls within Article 34 of the Financial Services and
Markets Act 2000 (Financial Promotion) Order 2005 (as amended, the
"Financial Promotion Order"), being a non-real time communication
communicated by and relating only to controlled investments issued,
or to be issued, by the Republic of Ghana.
Other than with respect to distributions by the Republic of
Ghana, this announcement is for
distribution only to persons who (i) have professional experience
in matters relating to investments falling within Article 19(5) of
the Financial Promotion Order, (ii) are persons falling within
Article 49(2)(a) to (d) ("high net worth companies, unincorporated
associations etc.") of the Financial Promotion Order, (iii) are
outside the United Kingdom, or
(iv) are persons to whom an invitation or inducement to engage in
investment activity (within the meaning of section 21 of the
Financial Services and Markets Act 2000) in connection with the
issue or sale of any securities may otherwise lawfully be
communicated or caused to be communicated (all such persons
together being referred to as "relevant persons"). This
announcement is directed only at relevant persons and must not be
acted on or relied on by persons who are not relevant persons. Any
investment or investment activity to which the announcement relates
is available only to relevant persons and will be engaged in only
with relevant persons.
1 The Bonds are those certain bonds respectively due
in August 2023, April 2025, January
2026, February 2027,
March 2027, April 2029, May
2029, October 2030,
March 2032, April 2034, February
2035, May 2042, June 2049, March
2051, March 2061 with the
following ISIN numbers: detailed in Annex C.
CONTACT: ghana@investor.morrowsodali.com
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SOURCE Republic of Ghana