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Ghana extends domestic debt exchange registration deadline

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ACCRA, Dec 17 (Reuters) –

Ghana has extended the registration deadline for a domestic debt exchange program to Dec. 30, as it considers making some adjustments while it seeks approval for an IMF debt relief program, the finance ministry said in a statement overnight on Friday.

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“The extension… affords Government of Ghana the opportunity to consider suggestions made by all Stakeholders with the aim of adjusting certain measures,” the ministry said in its statement, without detailing which points had been contentious.

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The debt exchange program will now have an expected settlement date of Jan. 6. The ministry had previously set a deadline of Dec. 19 for domestic bondholders to apply for the debt exchange, with new domestic bonds to be issued on Dec. 23.

Ghana, once considered a rising star among emerging market economies, is facing a generational debt crisis. Inflation was above 50% in November, and the government is spending between 70% and 100% of its revenue on interest payments.

On Tuesday, Ghana and the International Monetary Fund announced a staff-level agreement for a $3 billion relief program, which Reuters first reported late last week.

A debt sustainability analysis concluded earlier this month that Ghana’s debt burden was unsustainable. A comprehensive debt restructuring, including that of foreign debts, is a prerequisite for Executive Board approval, the IMF said on Tuesday.

“This extension will provide enough time for the necessary consultations and analysis to be completed to meet the expectations of local and foreign institutional bondholders while preserving the integrity of the Debt Sustainability Analysis and the Staff Level Agreement,” the finance ministry said in its Friday statement.

Under the domestic debt exchange, local bonds will be exchanged for new ones maturing in 2027, 2029, 2032 and 2037, and their annual coupon will be set at 0% in 2023, 5% in 2024 and 10% from 2025 until maturity. (Reporting by Cooper Inveen; Editing by Leslie Adler)

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