According to a statement released on Friday, S&P upgraded Ghana’s local credit rating from SD, or selected default, to CCC+ following the delivery of new domestic debt instruments to creditors. Although the government seeks to restructure the external bonds, the credit assessor continues to rate the West African country’s foreign-currency debt at SD, according to analysts Frank Gill and Ravi Bhatia.
“We understand that the authorities aim to lower debt to GDP to about 55% over a five-year horizon,” they wrote. “Discussions with holders of foreign currency instruments are continuing.
At the end of last year, Ghana has been talking to investors about restructuring around $30 billion of its $46 billion in domestic and foreign debt.
With investors exchanging 83 billion cedis ($6.7 billion), or 64% of holdings, for new assets, it just completed the first phase of a domestic reorganization. The total aim was 80%. According to Ken Ofori-Atta, minister of finance, it plans to begin “substantive” conversations with foreign bondholders and their advisors in the coming weeks.
Yet, because of the continuing discussion, bond payment schedules have been suspended. S&P downgraded three UK-law Eurobonds with maturities in 2023, 2027, and 2025 to D, or default, on Friday.
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