Keep your current bonds – Individual bondholders advised

Just 24 hours to go for the expiry of the latest deadline on the Domestic Debt Exchange Programme (DDEP), individual bondholders have been advised to hold on to their current bonds.

The Individual Bondholders Forum (IBF) in a statement on Thursday, February 9 said a virtual technical review meeting held with members concluded that subscribers may lose between 39 and 19 percent of their investment per the average of the original coupon rates of the Programme.

The Forum, therefore, recommended to members to self-exempt from the Programme, refrain from trading bonds ahead of the clear market period of six months and reinvest early bond maturities into old bonds at a discount or in short-dated papers like treasury bills.

It explained to members that the Programme has a higher risk of default while the government of Ghana can refuse to pay and restructure the bonds ad infinitum with no legal consequence.

By that the Forum told members that government grabs for itself a blanket immunity and investors have no enforceable legal recourse for a breach by government.

The Forum told members that their current bonds, contrary to the ones being offered by government, are protected with full legal rights retained and no government immunity from legal redress and are more expensive to breach.

It, therefore, advised members to keep their current bonds.

Government is racing behind time to get the bondholders to sign up for the Programme.

For the fourth time the Programme has been postponed with the latest moved from Tuesday, February 7 to Friday, February 10. Government adduced the ostensible reason that subscribers encountered hitches online while filling their forms.

According to the Minister of Finance, Ken Ofori-Atta, failure to get more bondholders to subscribe to the Programme will be inimical to the economy.


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