DDEP: Senyo Hosi debunks claims of tradability challenges for old bonds

Convener of the Individual Bondholders Forum, Senyo Hosi, has debunked claims that tradability of old bonds will be challenging for those who hold on to them.

He explained that the narrative being pushed by the government is not true.

“One thing I want to debunk is this whole subtle suggestion that there will be challenges with tradability. I do not subscribe to it. Our technical committee doesn’t either. It is a matter of opinion. But to have leaders publicly say this is a total lie. There is no way you will lose your money if you join the new bond.

“The estimation of the Minister is that we will have less of the old bonds in the market, which means that the new bonds will be a lot more active. We are reducing 67 papers to 12, before that we had 67, with some as low as 79 and 800 million, so how can we say that people with 50 billion cannot trade among themselves with the pension fund?” Senyo was quoted by citinewsroom.com.

This was his response to an earlier statement issued by the Finance Ministry that “upon a successful DDEP there will be very few of the ‘old bonds’ in circulation, and likely limit its tradability.”

The government in its revised terms explained that even though individual bondholders are exempted from the programme, it is still voluntary to participate in the programme.

The deadline for the programme has thus been extended for the fourth time to February 7, 2023, with revised terms as follows:

a. An affirmation that all individual bondholders are free not to participate;

b. However, upon a successful DDEP there will be very few of the ‘old bonds’ in circulation, and likely limit its tradability;

c. In this regard, the Government is pleased to make available the following alternative offer to encourage all individual bondholders to participate in the Exchange:

i. All individual bondholders who are below the age of 59 years will be offered instruments with a maximum maturity of 5 years, instead of 12 years, and a 10% coupon rate;

ii. All retirees (including those retiring in 2023) will be offered instruments with a maximum maturity of 5 years, instead of 12 years, and a 15% coupon rate.

“These developments have necessitated the final extension of the deadline 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 Finance Ministry added.

Meanwhile, a revised and final Exchange Memorandum will be released by Thursday, February 2, 2023.

SSD/DA