Ratings agency Moody’s has indicated a potential upgrade for Ghana’s credit rating following the country’s Eurobond exchange.

The New York-based firm announced that it has completed a periodic review of Ghana’s ratings, which include long-term issuer ratings of Caa3 for local currency and Ca for foreign currency.

These ratings reflect the government’s ongoing debt restructuring under the G20 common framework initiated in December 2022.

On June 24, 2024, the Ministry of Finance announced an agreement in principle with bondholders’ representatives on restructuring $13.1 billion of Eurobond debt, accounting for 21% of Ghana’s total debt in 2023.

Under this agreement, bondholders would forgo around $4.7 billion in principal without state-contingent triggers.

This agreement followed a Memorandum of Understanding (MoU) on June 12 between the Finance Ministry and the Official Creditor Committee (OCC) to restructure $5.4 billion of official sector external debt.

The IMF confirmed on June 28 that both restructurings are consistent with its programme parameters. The Ministry of Finance has since announced that Ghana’s debt treatment with the Eurobond holders is consistent with the Comparability of Treatment principle.

Following this development, Moody’s has indicated that all ratings are likely to be aligned at a higher level within the Caa-rating category, considering the liquidity constraints typically following a default event.