“Have no fears of being punished for rejecting DDE” – Bondholders told

The Ghana Individual Bondholders Forum has urged its members not to harbour any form of fear of being punished for rejecting the debt exchange programme by government.

According to the IBF, the law is in the favour of individual bondholders and that the Finance Minister has categorically stated that he will honour obligations under the old bonds and will not take any action to punish bondholders that reject the debt exchange programme.

The Forum however, noted that, any individual bondholder that feels compelled to support the debt programme for other reasons, should not hesitate to sign onto the programme.

The above assertions by the IBF is contained in a statement issued by the Forum on Monday, January 30, 2023.

The statement sought to provide updates on the Forum’s engagements with the Finance Minister on the debt exchange programme invitations for bondholders to participate in the debt programme ends today, January 31, 2023.

Read details of statement below:

DOMESTIC DEBT EXCHANGE (DDE) UPDATE AND WAY FORWARD 

INDIVIDUAL BONDHOLDERS AND COLLECTIVE INVESTMENT SCHEMES 

As the deadline for the proposed debt exchange remains set for the 31st of January 2023, we wish to  provide an update to individual bondholders and collective investment scheme investors, and fund  managers for their guidance.

HIGHLIGHTS OF MOF MEETING WITH IBF ON FRI. 27th JAN, 2023.

The Minister of Finance (FM) welcomed the IBF recommendations from the report and indicated that  it was something Ghana needs to consider.

The finance minister iterated the position that the DDE is voluntary for individuals. The government  will honour its obligations to individuals who opt to retain their original bonds. Thus, there will be no  punitive action against individuals who opt to retain the bonds.

The MoF has no responsibility for happenings on the secondary market. For this matter, the FM cannot assure market liquidity for the old bonds. He believes the benchmark bonds will be more tradable as  more of those will be in circulation.

The FM understands the unique position of individuals and collective investment schemes – as  enumerated by the IBF leadership – for which reason he is considering presenting a revised DDE offer on  Monday, 30th January 2022 for individuals to consider participating if they desire. It will remain purely  optional and voluntary.

THE IBF POSITION

We welcome the Minister’s affirmation of the rights of individual bondholders to have the benefits of  their current investment fully honoured without discrimination or punitive actions against non-DDE  individual investors. This, in effect, presents individuals with a self-exemption option which bears no  negative implications as far as government’s payment obligations are concerned.

The original bonds retain more economic value and provides stronger enforcement rights than the  DDE bonds. They are also well suited for the investment plans and life goals set by individuals at the time  of their investments. In our estimation, this makes the original bonds superior and will be more tradable  and liquid. We anticipate increased trading between individuals and pension funds who continue to  pursue higher and realistic returns.

The IBF remains willing and able to assist government further consider the proposed fiscal adjustments  and recommendations captured in the joint technical committee report. The report estimates savings or  fiscal space in excess of GHS83bn to assist government reduce its DDE indebtedness of GHS138bn.

The IBF as at the publication of this release has not received the MoF’s revised proposal for our  consideration, evaluation and advise to members.

Individuals, as responsible citizens, have subjected themselves to all the new tax regimes aimed at  boosting government revenue without complain. This is a massive contribution to government’s  economic turnaround strategy.

RECOMMENDATION TO INDIVIDUALS AND COLLECTIVE INVESTMENT SCHEMES

If you intend to optimise your investments, maintain your superior original/old bonds. Hence, do  not sign up to the DDE.

Do not harbour any form of fear of being punished for rejecting the DDE. The law is in your favour  and the Minister of Finance has been categorical in affirming your right by stating that he will  honour obligations under the old bonds and will not undertake any action to punish individuals  who reject the DDE.

If you feel compelled to support the DDE programme for other reasons, please, do not hesitate  to sign on to the DDE.

To support the turnaround of the economy, we encourage all not to lose confidence in Ghana’s financial system. The continuous investments and savings of everyone is required to spur the  growth of our economy.

We urge every citizen to file their taxes and honestly pay up all obligations due. We all owe it to  Mother Ghana to make things work.

We are grateful to the Finance Minister and the Government for the cooperation extended us during this  process.

Signed

Senyo K. Hosi

Convener

 

Source: norvanreports.com