Following a deal struck with official creditors earlier this month, Ghana has secured an agreement in principle with its bondholders for the restructuring of $13 billion in foreign debt, according to three sources quoted by Reuters.

According to two of the sources, bondholders will get a haircut on the principal of up to 37% as part of the transaction, and the bonds’ term will be extended. Under the weight of the COVID-19 pandemic, the conflict in Ukraine, rising global interest rates, and soaring debt, the West African country that produced gold and cocoa went into default on the majority of its $30 billion in foreign debt in 2022.

Ghana, like Zambia, enrolled in the G20 Common Framework’s debt treatment program. This program’s objectives are to speed up debt restructurings and include China, the newest significant bilateral lender, in the process. After Zambia, the first African nation to default during the pandemic became the first copper producer in southern Africa, its bondholders approved the restructuring earlier this month.

“Things are pretty close” for Ghana. A source who wished to remain anonymous stated, “We can anticipate an announcement by next week, as they were not authorized to speak to the media.”

According to the other two sources, the news might be released as early as this Friday. Due to the late hour, it was not possible to quickly reach the Paris Club, an alliance of creditor nations, or Ghana’s finance ministry for comment.

In mid-March, Ghana initiated formal negotiations with two groups of bondholders: one comprising regional African banks and another of Western asset managers and hedge funds.

However, the proposed agreement did not satisfy the requirements of the International Monetary Fund’s (IMF) debt sustainability analysis, causing the negotiations to break down in April and forcing both parties to reorganize to come up with a workable solution.

According to the three individuals, the agreement in principle was reached because it later aligned with an updated IMF debt framework on Ghana that was previously disclosed to bondholders.

The second-largest cocoa producer in the world signed an agreement with its official creditor committee earlier this month to formalize a debt restructuring agreement that was negotiated in January.

The agreement’s broad contours made it possible for the IMF executive board to convene on June 28 in Ghana to discuss a second assessment of the country’s $3 billion loan, a three-year package, and the release of the subsequent $360 million tranche.