Bondholders opt for conversion of GHS 926m principal payments into T-Bills

Ghana’s bondholders have been left frustrated and disappointed as the government continues to delay payments of outstanding coupons and principal amounts.

Senyo Hosi, the Convener of the Individual Bondholders Forum (IBF), has revealed that the amount owed by the government in outstanding coupons and principal payments currently stands at GHS 1.29bn (GHS 365m as coupons and GHS 926m as principal) a significant sum that excludes payments owed to pensioners.

Hosi made the statement during a virtual meeting with bondholders on Sunday, April 23, 2023, where he also noted that three coupons out of 24 coupon payments are due in the month of April.

The IBF has proposed to the government that it pays all matured and outstanding coupons and principal amounts in cash as and when they fall due. However, if the government faces liquidity challenges, it can convert the GHS 926m principal payments of matured bonds into treasury bills which must be issued at the prevailing market price, Hosi further noted.

Meanwhile, despite assurances from the government, the Pensioner Bondholders Forum has threatened to resume picketing at the premises of the Ministry of Finance if the government fails to pay all outstanding coupons and principals of bond investments by April 28, 2023.

The forum believes that this is the only way to put an end to the payment delays that have caused so much hardship to many pensioners

In a statement signed by its Convener, Dr. Adu Anane Antwi, the Pensioner Bondholders Forum expressed disappointment about the government’s inconsistency regarding assurances to pay all pensioners their outstanding coupons and principals of bond investments. The forum denies that any decision was reached during the meeting held with the leadership of Coalition of Individual Bondholders groups and the Pensioners Bondholders Forum, as indicated in the Ministry of Finance Press Release of April 14, 2023.

The Ministry of Finance has stated that the Joint Technical Committee constituted on January 18, 2023, will reconvene and agree on a pathway towards the settlement of the outstanding debt obligations by April 28, 2023. However, with the Pensioner Bondholders Forum denying that any decision was reached, it remains to be seen if the government can fulfill its promise to settle the outstanding coupons and principal amounts owed to bondholders, including pensioners.

The delay in payments of outstanding coupons and principal amounts has caused concern among bondholders who are looking for assurances from the government that their investments are safe and that they will receive the returns they are entitled to. The issue has also raised questions about the government’s ability to manage its finances effectively and efficiently, as the country continues to face economic challenges due to the prevailing inflation rate of 45% at end-March 2023.

The situation remains fluid, and it remains to be seen what the government will do to address the concerns of bondholders, including pensioners. The government will need to find a way to balance its financial obligations with the need to ensure that bondholders, including pensioners, are paid what they are owed. In the meantime, bondholders will be keeping a close eye on the situation, hoping for a swift resolution to this ongoing issue.