Ghana Extends Local Debt Swap Deadline a Fourth Time Amid Talks

Ekow Dontoh, Bloomberg News

LONDON - MARCH 26: A Ghana fan holds up Ghanaian flags during the international friendly match between Ghana and Mexico at Craven Cottage on March 26, 2008 in London, England. (Photo by Ryan Pierse/Getty Images) , Photographer: Ryan Pierse/Getty Images

(Bloomberg) -- Ghana’s government has extended a deadline for domestic bondholders to accept a debt-swap proposal while finalizing negotiations with holdouts.

The exchange offer for 137.3 billion cedis ($11.2 billion) of public debt, meant to close Tuesday, will now expire on Feb. 7, Ghana’s finance ministry said in a statement Tuesday. The new settlement date will be Feb. 14.

“A revised and final exchange memorandum will be released by Thursday Feb. 2,” the statement said.

The updated version improves the terms for individual bondholders, offering them instruments with a maximum maturity of five years instead of 12 years. Retirees are eligible to receive a 15% coupon rate, while individual investors below the age of 59 will get a 10% coupon rate, the finance ministry said.

The government is also finalizing talks with labor unions and pension fund trustees.

Ghana is working to restructure most of its public debt to qualify for a $3 billion bailout program from the International Monetary Fund. The West African economy, which needs 80% of the debt to be swapped through the voluntary program, has extended the deadline four times to make its offer more attractive to different categories of investors.

Ghana reached separate agreements last week with banks, which hold about a third of the debt, fund management firms, and insurance companies in a boost to the program.

The government, which unilaterally suspended interest payments on eurobonds last month, is also gearing up for talks with external bondholders in a bid to lower its public debt from an IMF estimate of 105% of gross domestic product in 2022 to 55% by 2028.