As Ghana completes its domestic debt exchange with creditors, S&P Global Ratings upgraded the assessment on the nation’s local currency debt.
The country still has a failure rating on its international debt.
According to a statement released on Friday, S&P upgraded Ghana’s local credit rating from SD, or selective default, to CCC+ following the delivery of new domestic debt instruments to bondholders.
As the government moves to restructure the external bonds, the credit assessor continues to rate the West African country’s foreign-currency debt at SD, according to experts Frank Gill and Ravi Bhatia.
“We understand that the authorities aim to lower debt to GDP to about 55% over a five-year horizon,” they wrote. “Discussions with holders of foreign currency instruments are continuing.”
Since the end of last year, Ghana has been talking to investors about restructuring about $30 billion of its $46 billion in domestic and foreign debt.
With investors exchanging 83 billion cedis ($6.7 billion), or 64% of assets, for new securities, it recently finished the first phase of an internal restructuring. The total goal was 80%.
According to Ken Ofori-Atta, minister of finance, it plans to begin “substantive” talks with foreign creditors and their advisors in the coming weeks.
However, the continuing debate means that individual bond payments have been suspended.
S&P downgraded three UK-law eurobonds with maturities in 2023, 2027, and 2025 to D, or default, on Friday.
A group of traders and investors decided on Friday to examine whether a missed coupon payment on one of the dollar bonds due in 2026 comprised a “credit event,” which might cause the insurance protection on the debt to start paying out.
Last week, Fitch Ratings downgraded Ghana’s local currency credit rating to default.
Following a delayed Eurobond payment, it also downgraded its foreign currency debt ranking to partial default.