Debt Exchange: Fitch to assign positive rating on Ghana if it reaches agreement with external creditors

Ghana would receive a positive rating again if it reaches an agreement with private creditors on the restructuring of its foreign-currency-denominated external debt, Fitch Ratings, has revealed.

According to the UK-based organisation, it will assign a Long-Term Foreign-Currency Issuer Default Rating based on a forward-looking assessment of its willingness and capacity to honour its foreign-currency debt.

This will enable it to return to the international market to borrow in the medium term.

“Once Ghana reaches an agreement with private creditors on the restructuring of its foreign-currency denominated external debt and completes that restructuring process Fitch will assign a Long-Term Foreign-Currency IDR based on a forward-looking assessment of its willingness and capacity to honour its foreign-currency debt”.

The country’s rating was improved to “CCC” from Restrictive Default after completing its domestic debt exchange programme.

Fitch however warned that renewed liquidity pressures, as a result of significant delays in the external debt restructuring process, will increase the probability of further restructuring.

Meanwhile, Fitch, adds that the Country Ceiling for Ghana is ‘B-‘.

For sovereigns rated ‘CCC+’ and below, it assumes a starting point of ‘CCC+’ for determining the Country Ceiling.