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Ghana Payment Halt Is Potential Repudiation, Swap Panel Rules

  • Plan to suspend payments is possible repudiation/moratorium
  • CDDC says the situation isn’t a credit event just yet
Accra, Ghana. 

Accra, Ghana. 

Photographer: Nipah Dennis/Bloomberg

The Republic of Ghana’s plan to suspend debt repayments is a potential repudiation or moratorium, according to a swaps panel. It’s a significant step toward the possible restructuring being labeled a credit event, which would trigger a payout on credit-default swaps linked to the nation’s bonds.

The Credit Derivatives Determinations Committee ruled on Wednesday that the statements released by Ghana’s Finance Ministry on Dec. 19 to announce a suspension of debt servicing on its eurobonds, commercial term loans and most of its bilateral debt, meet the definition of a “potential repudiation/moratorium,” according to a statement.