Deadline For DDEP Offer Elapses Today
The deadline for the Akufo-Addo-led government’s Domestic Debt Exchange (DDEP) offer will elapse today, February 7, 2022, after being extended four times.
Addressing the nation on the economy and the programme, on the eve of the deadline, Finance Minister Ken Ofori Atta urged stakeholders to patronise the offer.
The DDEP forms part of the government’s programme to get an International Monetary Fund (IMF) bailout.
On December 5, 2022, Finance Minister Ken Ofori Atta announced the programme that will transition the country to debt sustainable levels.
He noted that 137 billion of the country’s domestic debt needs to be restructured to get the country’s debt at a sustainable level.
Under the Programme, domestic bondholders are being asked to exchange their instruments for new ones.
In December, Ofori Atta said existing domestic bonds as of 1st December 2022 will have to be exchanged for a set of four new bonds maturing in 2027, 2029, 2032 and 2037. The annual coupon on all of these new bonds will be set at 0% in 2023, 5% in 2024 and 10% from 2025 until maturity.
Deadline Extensions
The programme was first scheduled to end on Monday, December 19, however, it was extended to December 30 with a contemplated settlement date of Friday, January 6, 2023.
At the time, it was reported that no financial institutions had taken up the offer, but the Finance Ministry said the extension was to help the financial sector secure internal and Executive Board approvals to take up the Exchange offer.
On December 24, the Finance Ministry announced the second extension after excluding pension funds from the programme and including individual bonds.
The programme was then extended to January 16, 2023.
In a tweet on 16 January, the Office of the Finance Minister announced the third extension following opposition by individual bondholders.
He noted that consultation is ongoing and therefore, the expiration for the offer has been extended to the end of January.
On January 31, Ofori Atta said the offer’s deadline had been extended to Tuesday, 7th February 2023, with a new settlement date of Tuesday 14th February 2023 following modifications to the programme.
Modifications
According to the Ministry, the Government of Ghana has made significant progress with all stakeholders, including financial sector industry associations and representative groups of individual bondholders, with respect to their participation in the Domestic Debt Exchange Programme (DDEP).
It said all individual bondholders below the age of 59 years will be offered instruments with a maximum maturity of 5 years, instead of 15 years, and a 10% coupon rate as part of the modification.
Also, all retirees- including those retiring in 2023- will be offered instruments with a maximum maturity of 5 years, instead of 15 years, and a 15% coupon rate.
The DDEP offer has now been declared voluntary.
No More Extension
Updating Ghanaians about the deadline for the offer on February 6, Ofori Atta said there will be no more extensions.
He noted that earlier extensions were requisite to address the concerns of stakeholders.
“Tomorrow, Tuesday, 7th February 2023, is the final deadline for institutions and individuals to sign up for Ghana’s Domestic Debt Exchange Programme.”
Participation
It is not yet known the number of stakeholders who have signed up for the offer, however, the Minister urged investors to patronise it.
He noted that non-participation or a lower-than-expected turnout for the DDEP will prolong efforts to resolve the current economic crisis.
Additionally, he said the prospects of international financial support and other financial assurances would be jeopardised.
“This development could further put strain and stress on the Government’s capacity to honour key commitments. This is not what we want for our economy. What we want is an economy that is back on track, stable, vibrant, productive, dynamic; meeting the needs of individuals, households, and enterprises; delivering shared and inclusive growth; and improving incomes and livelihoods.”
The government takes the strong view that the DDEP will safeguard the well-being of our pensioners; Preserve the savings of individuals; and Protect the working capital of businesses.
Source: opemsuo.com/Hajara Fuseini
