Ghana: S&P Global downgrades Ghana to ‘CC’ from ‘CCC-plus’ with default a ‘virtual certainty’

A Reuters report has stated that a rating agency, S&P Global has downgraded Ghana’s long-term local currency bonds to “selective default”.

According to the report, Ghana’s foreign currency debt has been cut from “CCC-plus” to “CC” with default a “virtual certainty”.

“S&P said Ghana’s proposed local debt swap is a “distressed exchange offer,” earning those bonds the “selective default” rating, while the foreign currency bonds downgrade responds to the government’s announced plans to restructure that debt,” the report said on December 6, 2022.

The downgrade comes on the back of a proposed debt exchange programme announced on December 5, 2022, by the government.

The government made an invitation to “holders of domestic debt to voluntarily exchange approximately GH¢137 billion of the domestic notes and bonds of the Republic, including E.S.L.A. and Daakye bonds, for a package of New Bonds to be issued by the Republic.”

The move has been regarded as a clear admission of probable default on its bonds.

Meanwhile, Parliament on December 6, 2022, approved the proposed 2023 budget statement and economic policy of government.