Government Announces New Offer For Individual Bondholders

The Government has announced an alternative offer for individual bondholders as it seeks to get their buy-in for the Domestic Debt Exchange Programme (DDEP). The Ministry of Finance in a press release noted that individual bondholders who are below the age of 59 years will be offered instruments with a maximum maturity of five years, instead of the 12 years, and a 10 percent coupon rate.

For all retirees, including those retiring in 2023, the government is offering instruments with a maximum maturity of 5 years, instead of 12 years, and a 15 percent coupon rate. Additionally, the Finance Ministry said discussions are being finalised with Organized Labour and Pension Fund Trustees, on a separate arrangement in accordance with the Memorandum of Understanding signed with Organized Labour on 22nd December 2022, and in line with government’s debt management Programme.

Deadline Extension
The government also announced the extension of the deadline for individual bondholders from January 31, 2023, to Tuesday February 7, 2023, and a new settlement date of Tuesday February 14, 2023 that will be confirmed via the new Exchange Memorandum.

The release indicated that although individual bondholders are free not to participate in the programme, upon a successful DDEP, there will be very few of the old bonds’ in circulation, and likely limit its tradability. “With this, Government encourages all stakeholders to participate in the DDEP, an essential step towards meeting our debt sustainability targets and restoring macroeconomic stability and economic growth,” it said.