<\/p>\n
S&P Global has downgraded Ghana\u2019s long-term local currency bonds to \u201cselective default\u201d and cut the country\u2019s foreign currency debt to \u201cCC\u201d from \u201cCCC-plus,\u201d with default a \u201cvirtual certainty,\u201d the rating agency said in a statement on Tuesday.<\/p>\n
S&P said Ghana\u2019s proposed local debt swap is a \u201cdistressed exchange offer,\u201d earning those bonds the \u201cselective default\u201d rating, while the foreign currency bonds downgrade responds to the government\u2019s announced plans to restructure that debt.<\/p>\n
Ghana\u2019s Parliament on Tuesday narrowly approved the proposed 2023 budget, overcoming resistance from opposition lawmakers over the inclusion of the debt exchange and a higher value-added tax.<\/p>\n
The S&P downgrade comes after a recent downgrade deeper into junk territory by Moody\u2019s Investors Service on the likelihood that private creditors will incur steep losses during the government\u2019s planned debt restructuring.<\/p>\n
The country\u2019s credit rating was slashed by two levels to Ca, the second-lowest score at Moody\u2019s. That puts Ghana on par with Sri Lanka, which is in default.<\/p>\n
\u201cThe Ca rating reflects Moody\u2019s expectation that private creditors will likely incur substantial losses in the restructuring of both local and foreign currencies debts planned by the government as part of its 2023 budget proposed to Parliament on 24 November 2022.<\/p>\n
\u201cGiven Ghana\u2019s high government debt burden and the debt structure, it is likely there will be substantial losses on both categories of debt in order for the government to meaningfully improve debt sustainability,\u201d analysts Lucie Villa and Marie Diron wrote in the statement.<\/p>\n<\/p><\/div>\n","protected":false},"excerpt":{"rendered":"
S&P Global has downgraded Ghana\u2019s long-term local currency bonds to \u201cselective default\u201d and cut the country\u2019s foreign currency debt to \u201cCC\u201d from \u201cCCC-plus,\u201d with default a \u201cvirtual certainty,\u201d the rating agency said in a statement on Tuesday. S&P said Ghana\u2019s proposed local debt swap is a \u201cdistressed exchange offer,\u201d earning those bonds the \u201cselective default\u201d […]<\/p>\n","protected":false},"author":1,"featured_media":1226718,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[72],"tags":[22495,1580,20966,4336,85,278],"class_list":["post-1263172","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business","tag-ccc","tag-debt","tag-default","tag-downgrades","tag-ghana","tag-local"],"_links":{"self":[{"href":"https:\/\/www.ghanamma.com\/2022\/wp-json\/wp\/v2\/posts\/1263172","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.ghanamma.com\/2022\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.ghanamma.com\/2022\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.ghanamma.com\/2022\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.ghanamma.com\/2022\/wp-json\/wp\/v2\/comments?post=1263172"}],"version-history":[{"count":0,"href":"https:\/\/www.ghanamma.com\/2022\/wp-json\/wp\/v2\/posts\/1263172\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.ghanamma.com\/2022\/wp-json\/wp\/v2\/media?parent=1263172"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.ghanamma.com\/2022\/wp-json\/wp\/v2\/categories?post=1263172"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.ghanamma.com\/2022\/wp-json\/wp\/v2\/tags?post=1263172"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}