The Government has reduced domestic bondholder interest payments to zero percent in 2023.
The coupon payments will be semi-annual, and the interest rate has been set at 5% in 2024, rising to 10% in 2025, until maturity.
There won’t be a haircut on bond principal, according to Finance Minister Ken Ofori-Atta, who spoke in front of the public on the state of the economy on Sunday, December 4.
He maintained that holders of government bonds would receive their entire investment at maturity.
He said the government would make sure that investors’ money is safe.
Treasury notes and other debt instruments won’t be impacted, according to the finance minister.
“Under the domestic bonds exchange programme, domestic bondholders will be asked to exchange their instruments for new ones. Existing domestic bonds as of 1st December 2022 will be exchanged for a set of four new bonds maturing in 2027, 2029, 2032 and 2037.
“The annual coupon on all these bonds will be set at zero percent in 2023, 5 percent in 2024 and 10 percent from 2025 until maturity… In line with this, treasury bills are completely exempted, and all holders will be paid the full value of their investments on maturity. There will be no haircuts on the principal of bonds, and individual holders of bonds will also not be affected.”
The Finance Minister emphasized further that the appropriate financial regulators have implemented measures to guarantee that the financial sector’s stability is safeguarded and the impact on investors is minimized.
“The government recognises that our financial institutions hold a substantial proportion of these bonds, hence the potential impact of this exchange on the financial sector has been assessed by their respective regulators. These regulators have put together appropriate measures to safeguard and minimise the potential impact on the financial sector and to ensure that financial stability is preserved.”
Priscilla Fumadorh
Priscilla is an entrepreneur and a creative communicator who loves to communicate through writing. She is passionate about national economic issues and does not miss a chance to offer her opinions on them for the good of the country.
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