Ratings agency, Fitch, has downgraded Ghana's Long-Term Foreign-Currency (LTFC) Issuer Default Rating (IDR) to 'RD' (Restrict Default) from 'C' after the country missed the grace period to make a coupon payment ($40.6 million) on one of its Eurobonds.
Fitch typically doesn't assign Outlooks to sovereigns with a rating of 'CCC+' or below.
Fitch also downgraded the rating of the country's $1 billion Eurobond maturing on January 18, 2026 to 'D' from 'C' and withdrawn its rating.
It affirmed throughout the entire the term senior unsecured foreign currency denominated issue ratings at 'C' and withdrawn their ratings. It also certified the partially ensured $1 billion notes maturing in 2030 at 'CC'.
Once more, "issue ratings for throughout the entire other term senior unsecured foreign-currency (FC)- denominated instruments have been withdrawn as these instruments are not generally considered by Fitch to be pertinent to the agency's coverage given that the sovereign has reported a moratorium on these instruments and they will be included in the common framework outer debt restructuring", it said
Fitch expects that these remaining instruments should default at the appropriate time, either as the sovereign misses debt service payments or as an arrangement is reached at on restructuring the bonds.
Ghana on Friday missed making the $40.6 million coupon payment on its $1 billion 2026 Eurobond, as a part of the suspension of payments on selected outer debt that the government reported in December, Fitch said.
The country has about $13 billion in dollar-denominated international bonds, or Eurobonds, as they are also known.
A large part of the debt were trade at between 37 cents and 41 cents on the dollar on Tuesday.
On February 14, 2023; Fitch had already downgraded Ghana's local debt rating to 'restricted default'.
Ghana's DDEP
The Ministry of Finance on February 14, 2023 declared that around 85% of bondholders took part in the Domestic Debt Exchange Programme (DDEP).
This added up to ¢82,994,510,128 (¢82.99 billion)
"The government is satisfied with the outcomes, as a substantial majority of the Qualified Holders have tendered," an statement from the ministry said.
It added that the outcome is a huge achievement for the government to carry out completely the economic strategies in the post-Coronavirus Programme for Economic Growth (PC-Stake) during the current economic crisis.
To give adequate time to settle the New Bonds in a productive way, the statement explained that government is extending the Settlement Date of the Exchange from the previously announced February 14, 2023 to February 21, 2023.