Gov’t commences alternative offer for GHS31bn pension funds exchange

The government of Ghana has initiated an alternative offer for pension funds exchange, inviting holders of domestic notes and bonds from the central government, E.S.L.A Plc, and Daakye Trust Plc.

The aim is to exchange approximately GHS 31 billion principal amount of eligible bonds for a package of new bonds.

In a statement released on Monday, 31 July 2023, the ministry of finance said the invitation is intended to enable pension funds to preserve their patrimonial value while exchanging their eligible bonds for bonds that offer more potential liquidity.

This move comes after the recent launch of dollar-denominated bonds and cocoa bills exchange.

The invitation is exclusively available to registered holders of eligible bonds that are Pension Funds (“Eligible Holders”).

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Those tendering their eligible bonds in response to the invitation will receive Exchange Bonds of the Government, subject to the terms and conditions described in the Exchange Memorandum.

Offers to exchange eligible bonds made by Eligible Holders are irrevocable, with limited withdrawal rights under certain circumstances.

Eligible Holders are also required to consent to the blocking by the Central Securities Depository (CSD) of any attempt to transfer the bonds prior to the Settlement Date or the termination of the Invitation by the Republic.

The submission of offers can be made starting from the “Launch Date” until 4:00 p.m. (Greenwich Mean Time) on 18th August 2023 (the “Expiration Date”), with the possibility of extension by the Government, including for one or more series of eligible bonds.

Eligible Holders whose offers are accepted by the Government will receive on the Settlement Date (on or before 25th August 2023) the same aggregate principal amount distributed across new tranches of the currently outstanding GOG Bonds issued in February 2023 and maturing in 2027 and 2028, as well as two additional interest payment instruments linked to the Exchange Bonds, maturing respectively in 2027 and 2028.

The proportions of New Tranches and New Interest-Only Bonds to be received by tendering Eligible Holders will be allocated accordingly.

The invitation is set to expire on the “Expiration Date,” and offers may not be revoked or withdrawn except in limited circumstances as described in the Exchange Memorandum.

The government, the statement said, reserves the right to extend the Settlement Date (including for one or more series of eligible bonds) until the “Longstop Date,” which should not be later than 28th August 2023.

Further extensions of the Settlement Date will grant withdrawal rights to Eligible Holders who submitted offers before such extension, subject to the conditions outlined in the Exchange Memorandum.

Source: Classfmonline.com