February 21, 2023

Fitch Downgrades Ghana’s Long-Term-Foreign Currency To “RD”

International rating agency Fitch has downgraded Ghana’s Long-Term Foreign-Currency (LTFC) Issuer Default Rating (IDR) to ‘RD’ (Restricted Default).



This comes after the same agency downgraded Ghana’s Long-Term (LT) Local Currency (LC) Issuer Default Rating (IDR) to Restricted Default (RD) last week.



RD means Ghana has experienced an uncured payment default or distressed debt exchange on a bond, loan or other material financial obligation, but has not entered into bankruptcy filings, administration, receivership, liquidation, or other formal winding-up procedure, and has not otherwise ceased operating.



As of last week’s grading, the country’s Long-Term Foreign-Currency (LTFC) Issuer Default Rating (IDR) was rated “C”.



The current rating is premised on the expiration, on 17 February 2023, of the grace period for a missed USD40.625 million coupon payment on its USD1 billion 18 January 2026 Eurobond, as part of the suspension of payments on selected external debt that the government of Ghana announced on 19 December 2022, Fitch said.



In addition to that, Fitch has downgraded the rating of the country’s USD1 billion Eurobond maturing on 18 January 2026 to ‘D’ from ‘C’ and withdrawn its rating.



“Fitch has affirmed all the long-term senior unsecured foreign-currency-denominated issue ratings at ‘C’ and withdrawn their ratings. Fitch has also affirmed the partially-guaranteed USD1 billion notes maturing in 2030 at ‘CC’.



“Issue ratings for Ghana’s USD1 billion notes paying 8.125% and maturing on 18 January 2026 (ISIN US374422AC70 and ISIN XS1108847531) have been withdrawn because of default. Issue ratings for all other long-term senior unsecured foreign-currency (FC)-denominated instruments have been withdrawn as these instruments are no longer considered by Fitch to be relevant to the agency’s coverage given that the sovereign has announced a moratorium on these instruments and they will be included in the common framework external debt restructuring. Fitch expects all of these remaining instruments to default in due course, either as the sovereign misses debt service payments or as an agreement is reached on restructuring the bonds.”


Fitch has concluded that Ghana is in debt distress.


According to the agency, the country’s partially guaranteed notes could be further downgraded, depending on the evolution of the debt restructuring.





Source: opemsuo.com/Hajara Fuseini

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