The deadline for individual bondholders to agree to the government’s invitation to the Domestic Debt Exchange Program (DDEP) ends today.
Reports, however, reached the Daily Graphic showing that the response has been very poor with millions of bondholders refusing to sign, a development confirmed by several banks.
It is unclear what the government’s response to the development will be, but it could force a delay in the deadline for further consultation.
Some bondholders, since the DDEP announcement, have continued to call on the government to stick to its initial goal of kicking them out of the program.
Message to bondholders
Last Thursday, several commercial banks in the country sent messages to individual bondholders to subscribe to the government’s DDEP.
One of the messages accessed by the Daily Graphic read; “In accordance with the directives of the Minister of Finance on the Domestic Debt Exchange Program, we would like to inform you about the addition of eligible individuals.
“Remember that this exercise is purely voluntary and if you want to participate, use your CSD ID… through this link… This link expires on Thursday, January 12, 2023.”
The message also provides a phone number for further clarification.
Group
As the deadline approached, a group formed by bondholders emerged to intensify pressure on the government to reverse its decision.
One such group, the Pension Bond Holders Forum, which has a membership of more than 400 pensioners, has asked the government not to add its members to the program.
The forum, which is also the mouthpiece of all pensioners across the country with investments in government bonds, held a press conference last Wednesday to express their frustration.
The Convener, former Director General of the Securities and Exchange Commission (SEC), Dr. Adu Anane Antwi, stated in a press conference that the petition was sent to the Minister of Finance and the President.
The pensioners said that their monthly pension from SSNIT has been depleted due to inflation to the extent that the coupons received from investments in government bonds have become their core income while they await the payment of the principal amount at maturity.
It is important to note that periodic coupon payments are what retirees use to meet their daily needs, such as eating, buying regular medications for chronic health problems, paying other medical bills, paying school fees. children, paying electricity and water bills, taking care of dependents, paying for transportation, accommodation and related expenses, and meeting expenses related to social engagements and other expenses,” he said.
Another group, the Ghana Individual Bondholders Forum, formed by the Chief Executive Officer of the Bulk Oil Distribution Company (BDC), Senyo Hosi, is seeking signatures from individual bondholders to petition the government on the matter.
As of yesterday, more than 30,000 bond holders have signed according to Mr. Hosi, which reflects the government’s position not in the interest of the people.
He told the Daily Graphic that pressure would be maintained and asked all those affected to join the group to increase the number.
Exposure
Individual bondholders in the country at the time of the announcement numbered about six million.
The total amount of government bonds is about GH¢8 billion.
new arrangement
On December 5, 2022, the government, in an effort to overcome the economic crisis that has now become an economic crisis, launched the exchange of domestic debt under the invitation of having some GH¢ 137.3 billion of the principal amount remaining in some domestic. notes and bonds issued by the government, ESLA Plc or Daakye Trust Plc to replace Eligible Bonds for the new bond package to be issued by the government.
Expiration date is December 19, 2022.
However, the government then announced the extension of the expiration date to Friday, December 30, 2022 and the settlement date to Friday, January 6, 2023.
Among many other issues, including various agitations from the workforce and the financial services sector, the government, on December 24, announced its decision to extend the expiration date of the invitation from Friday, December 30, 2022 to Monday, January 16, 2023. 4:00 p.m
According to the press release, which was distributed by the Ministry of Finance, the settlement date of the invitation will now be Tuesday, January 24, 2023, or as soon as possible, but not later than the longstop date that is currently scheduled. Tuesday, January 31, 2023, unless further extended by the government according to the invitation.
The announcement date of each release is currently expected to occur on or around January 17, 2023.
A new term
In addition to the extension, the government announced modifications to the Invitation to Exchange, which are described in detail in the Term Sheet:
Offers recognized and unpaid interest on eligible bonds, and payment of cash tender fees to holders of eligible bonds maturing in 2023; Increase the new bonds offered by adding eight new instruments to the new bond composition, for a total of 12 new bonds, one maturing each year from January 2027 and the end of January 2038; Change the Exchange Consideration Ratio for each new bond. The Exchange Consideration Ratio applicable to eligible bonds maturing in 2023 will differ from other eligible bonds; Set a target minimum level of overall non-binding participation of 80 percent of the principal amount of eligible bonds; and expand the types of investors who can participate in the exchange to now include individual investors.
These changes, the release said, will be fully defined in the amended and restated exchange memorandum which is expected to be published during the week of December 26, 2022. mentioned above. and modifications to cure ambiguities, omissions, defects, errors or inconsistencies may be included in the amended and rewritten exchange memorandum.
Source: Graphiconline
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