Government embarks on alternative DDEP for ¢31bn pension funds

The Ministry of Finance has announced the restructuring of ¢31 billion pension funds in the next exercise of its Domestic Debt Exchange Programme (DDEP).

According to the ministry, the exercise will affect the E.S.L.A. Plc and Daakye Trust Plc.

This will include debt in the energy sector such as debt owed the independent power producers (IPPs) and the cocoa bills.

“This Invitation is intended to enable the Pension Funds to preserve their patrimonial value while exchanging their Eligible Bonds for Bonds that offer more potential liquidity” a statement issued by the Public Relations Unit said.

It explained that Eligible Holders tendering their Eligible Bonds pursuant to the invitation will receive Exchange Bonds of the Government on the terms and subject to the conditions described in the Exchange Memorandum.

It added that all offers to exchange Eligible Bonds made by Eligible Holders are irrevocable subject to withdrawal rights under certain limited circumstances.

The statement explained that by “tendering their Eligible Bonds, Eligible Holders represent and warrant that such Eligible Bonds constitute all the Eligible Bonds owned by them and consent to the blocking by the Central Securities Depository (CSD) of any attempt to transfer them prior to the Settlement Date (as defined below) or the termination of the Invitation by the Republic”.

Offers may only be submitted starting today (the “Launch Date”) and ending at 4:00 p.m. (Greenwich Mean Time (GMT)) on 18th August 2023 (the “Expiration Date”).

Below is the full statement

     31st July 2023

PRESS RELEASE

FOR: IMMEDIATE RELEASE

Commencement of THE ALTERNATIVE OFFER FOR THE pension funds EXCHANGE

ACCRA, 31st July 2023 … The Government of the Republic of Ghana (the “Government”) announced today that it is inviting (the “Invitation”) Pension Funds (as defined in the Exchange Memorandum referred to below) holding domestic notes and bonds of the central Government, E.S.L.A. Plc and Daakye Trust Plc specified in Tables A below (the “Eligible Bonds”) to exchange approximately GHS 31 billion principal amount of Eligible Bonds for a package of new bonds (the “Exchange Bonds”) as specified in Table B below. The terms and conditions of the Invitation are described in the exchange memorandum dated today (the “Exchange Memorandum“).

• This Invitation is intended to enable the Pension Funds to preserve their patrimonial value while exchanging their Eligible Bonds for Bonds that offer more potential liquidity.

Summary of the Invitation

• The Invitation is available only to registered holders of Eligible Bonds that are Pension Funds (“Eligible Holders”).
• Eligible Holders tendering their Eligible Bonds pursuant to the Invitation will receive Exchange Bonds of the Government on the terms and subject to the conditions described in the Exchange Memorandum. All offers to exchange Eligible Bonds made by Eligible Holders (an “Offer” or “Exchange Instruction”) are irrevocable subject to withdrawal rights under certain limited circumstances. By tendering their Eligible Bonds, Eligible Holders represent and warrant that such Eligible Bonds constitute all the Eligible Bonds owned by them and consent to the blocking by the Central Securities Depository (CSD) of any attempt to transfer them prior to the Settlement Date (as defined below) or the termination of the Invitation by the Republic.
• See Table B below for a detailed description of the financial terms of the Exchange Bonds.
• Offers may only be submitted starting today (the “Launch Date”) and ending at 4:00 p.m. (Greenwich Mean Time (GMT)) on 18th August 2023 (the “Expiration Date”). However, the Government may extend the Expiration Date (including for one or more series of Eligible Bonds).
• Eligible Holders who deliver valid Offers at or prior to the Expiration Date that are accepted by the Government will receive on the Settlement Date (as defined below) in exchange for their Eligible Bonds accepted by the Government, the same aggregate principal amount distributed (in the proportions indicated below) across new tranches of the currently outstanding GOG Bonds issued in February 2023 and maturing in 2027 and 2028 (respectively, the “GOG Bond 2027” and the “GOG Bond 2028”, and collectively, such new tranches issued pursuant to the Invitation, the “New Tranches”). In addition to the Exchange Bonds, tendering Eligible Holders will receive a distribution of two additional interest payment instruments linked to the Exchange Bonds, with no principal amount, each maturing, respectively, in 2027 and 2028 (collectively, the “New Interest-Only Bonds”).
• The proportions of New Tranches and New Interest-Only Bonds to be received by tendering Eligible Holders in exchange for their Eligible Bonds are allocated as set forth on Table C
• The Invitation will expire at 4:00 p.m. (Greenwich Mean Time) on 18th August 2023, unless extended or earlier terminated by the Government as set forth in the Exchange Memorandum (the “Expiration Date”). Offers may not be revoked or withdrawn at any time except in the limited circumstances described in the Exchange Memorandum.

1. On 25th August 2023 (the“Settlement Date”) the Government will issue the New Bonds to Eligible Holders whose Offers are accepted for credit to the account of such Eligible Holder at Ghana’s CSD. The Government reserves the right to extend the Settlement Date (including with respect to one or more series of Eligible Bonds) without offering Eligible Holders the right to withdraw their Offers, provided that such extended Settlement Date is not later than 28th August 2023 (the “Longstop Date”). The Government may extend the Settlement Date beyond such Longstop Date and designate a new Longstop Date, but such extension will be subject to the granting of withdrawal rights to Eligible Holders who submitted Offers before such extension, subject to the conditions described in the Exchange Memorandum.
2. Any questions or requests for assistance regarding the Invitation may be directed to CSD and/or the Information and Coordination Agent (as defined below) at the contact information set forth below. 
3. Eligible Holders, or custodians for such holders, of Eligible Bonds may obtain a copy of the Exchange Memorandum by accessing the Pension Funds Invitation Websites.

Summary of the Exchange Procedures for Eligible Holders

1. Eligible Holders interested in participating in the Invitation are invited to send an Offer or Exchange Instruction to their respective CSD Direct Participant (the Depository Participant), in the form and via the channels agreed and customary between them.
2. As of the Launch Date until the Expiration Date of the Invitation, Eligible Holders having active securities accounts balances and interested in participating in the Invitation will have the opportunity to send an Offer or Exchange Instruction to their respective CSD Direct Participant (Depository Participant).
3. Eligible Holders may download an Exchange Form from the website of the CSD (www.csd.com.gh/dde), complete and send it to their CSD Direct Participant (Depository Participant) via email or via any internal communication platform they use (if any), or send an instruction in the format, or via any other standard means of communication available and accepted by the such CSD Direct Participant (Depository Participant).
4. By submitting an Offer or Exchange Instruction, Eligible Holders consent to the blocking by the CSD of any attempt to transfer such Eligible Holders’ Eligible Bonds prior to the Settlement Date or the termination of the Invitation to Exchange.
5. For more details on these procedures, please refer to the Exchange Memorandum or contact the CSD at the contact information below. END

ISSUED BY THE PUBLIC RELATIONS UNIT

MINISTRY OF FINANCE

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Tables A—Eligible Bonds

1. GHS-denominated Eligible Bonds issued by the Republic of Ghana

• • GHS-denominated Eligible Bonds issued by E.S.L.A. Plc.

• • GHS-denominated Eligible Bonds issued by Daakye Trust Plc.

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Table B — Financial Terms of the Exchange Bonds

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Table C—Exchange Consideration Ratios

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This announcement is for informational purposes only and is not an invitation to exchange to any holders of Eligible Bonds. The invitation to exchange to Eligible Holders is only being made pursuant to the Invitation. Holders of Eligible Bonds should read the Exchange Memorandum carefully prior to making any decision with respect to tendering their Eligible Bonds because it contains important information.

None of the Information and coordination Agent, the financial advisor nor any of their respective directors, employees, affiliates, agents or representatives makes any recommendation as to whether Holders should deliver their offers in connection with THEIR ELIGIBLE BONDS pursuant to thE INVITATION, and no one has been authorized by any of them to make such a recommendation. Each Holder must make its own decision as to whether to TENDER THEIR ELIGIBle bonds.