International ratings agency, Fitch Ratings has downgraded Ghana’s Long-Term (LT) Local Currency (LC) Issuer Default Rating (IDR) to Restricted Default (RD) from ‘C’.
The issue ratings on local-currency bonds issued domestically have also been downgraded to Default (D) from ‘C’. Fitch has affirmed Ghana’s Long-Term Foreign Currency (FC) IDR at ‘C’.
This means that Ghana’s creditworthiness has been further downgraded to junk status.
Among a number of reasons given for the recent downgrade, Fitch mentioned the downgrade of Ghana’s local-currency denominated debt following the completion of a domestic debt exchange offer by the Republic of Ghana.
Fitch downgraded the Long-Term Foreign Currency Issuer Default Ratings (IDR) to ‘C’ from ‘CC’ on Dec. 21, 2022 following the government’s announcement of a suspension of payments on selected external debt.
Ghana subsequently asked official creditors for a restructuring of its external debt under the G20 Common Framework. A Eurobond coupon payment, due on Jan. 18, 2023, has not been honoured.
Fitch has affirmed the LT FC IDR at ‘C’ but will downgrade it to ‘RD’ after the end of the grace period for this coupon payment that expires on Feb. 17, 2023.
