Debt Exchange Programme: Don’t Sign On To New Terms "Martin Kpebu To Individual Bondholders"

In spite of the revisions made to the terms of individual bondholders who wish to participate in the government’s Domestic Debt Exchange Programme (DDEP), holders in that category have been urged not to sign on to the new terms.

They are to stay calm and not be tempted by the latest communication from the Ministry of Finance for them to voluntarily accept the new terms.

Per the publication, as announced in a release issued yesterday, individual bondholders who are below the age of 59 years would be offered instruments with a maximum maturity of five years, instead of 15 years, and a 10 per cent coupon rate.

Meanwhile, by way of the consequences for not signing on, it warned, however, that all individual bondholders are free not to participate; however, upon a successful DDEP there will be very few of the ‘old bonds’ in circulation, and likely limit its tradeability.

But in an interview with the Daily Graphic, one of the lawyers for the individual bondholders, Martin Kpebu, asked them not to heed the call and await for their bonds to mature.

Beginning today February 1, reports say about GH¢4 billion is expected to mature and paid out to individual bondholders, a development, Mr Kpebu believes, will be honoured without fail.

He argued that many of the people who severely suffered from the financial sector cleanup had their funds converted into bonds and, therefore, “if this is the time for them to have some relieves, they can no longer sacrifice what is due them.”

“They do not have to sign on to any new terms because the Minister of Finance, Ken Ofori Atta, has assured the individual bondholders that they will be exempted and that is what everybody must hold on to,” he said.

Terms for retirees

One of the thorny areas in the DDEP has been how retirees are to be treated under the programme.

Some of the retirees holding government bonds had made a strong case for the government to exempt them from the programme because of what they described as a peculiar case.

But in the latest twist to the unfolding events, the release said “All retirees (including those retiring in 2023) will also be offered instruments with a maximum maturity of five years, instead of 15 years,” and a 15 per cent coupon unlike the 10 per cent offered the individual bondholders below the ages of 59.

Expert views

Meanwhile, the action of the government has been described by some analysts as chaotic and one creating more confusion and doubt in the minds of the people.

They said the latest development where the date of expiry had been shifted gave clear indication that the government was finding it difficult to attain the minimum of 80 per cent acceptance to enable it to move to the next step towards accessing the first tranche of the $3 billion balance of payment support from the International Monetary Fund (IMF).

With the government’s foreign exchange reserves at about six weeks of import cover, it is racing against time to ensure that the reserves do not get depleted to put extra pressure on the local currency which has already lost almost 20 per cent of its value in the first month of the year.

Deadline extension

The government has announced what it described as its final extension of the deadline from January 31, 2023, to Tuesday, February 7, 2023, and a new settlement date of Tuesday, February 14, 2023 that will be confirmed via the new Exchange Memorandum, according to the release.

With the new terms and deadline extension, the government, in the release, encouraged all stakeholders to participate in the DDEP, an essential step towards meeting the country’s debt sustainability targets and restoring macroeconomic stability and economic growth.

Source: graphic.com.gh