Moody’s has hinted at a possible upgrade of Ghana’s credit rating following the country’s recent Eurobond exchange.
The New York-based ratings agency conducted its regular review of Ghana’s ratings, currently Caa3 for local currency and Ca for foreign currency issuers.
These ratings reflect Ghana’s ongoing debt restructuring efforts under the G20 common framework initiated in December 2022.
On June 24, 2024, Ghana’s Ministry of Finance announced a preliminary agreement with bondholders’ representatives to restructure $13.1 billion in Eurobond debt, which accounts for 21% of the country’s total debt in 2023.
As part of the agreement, bondholders agreed to waive approximately $4.7 billion in principal without state-contingent triggers.
Earlier in June, the Finance Ministry and the Official Creditor Committee (OCC) reached a Memorandum of Understanding (MoU) to restructure $5.4 billion in official sector external debt. On June 28, the International Monetary Fund (IMF) confirmed that both debt restructurings align with its program parameters.
The Ministry of Finance subsequently affirmed that Ghana’s treatment of Eurobond holders adheres to the principle of Comparable Treatment.
In response to these developments, Moody’s has indicated a potential upward adjustment of all ratings within the Caa category, taking into account the typical liquidity challenges associated with debt restructuring following default events.
