Ghana’s 750 million US dollars loan from Afreximbank has received backing from official creditors, a move that would normally indicate the lender accepted some level of loss on the loan, Reuters reported.

The Paris Club, a group of rich-nation lenders, has welcomed the agreement, sources familiar with its thinking said, provided it aligns with “comparability of treatment” standards. These could involve reducing the principal, extending the loan’s maturity, lowering interest rates, or a combination of these measures.

Afreximbank, officially the African Export & Import Bank, told Reuters it had resolved the “issues” surrounding the loan to the “satisfaction of both parties,” without confirming whether it incurred losses. Any such losses could affect its credit rating and increase its funding costs.

Ghana announced the deal on Christmas Day, but details of the restructuring have not been publicly disclosed. The government did not immediately comment on the Paris Club’s response.

The agreement closes Ghana’s last major debt restructuring hurdle, but it raises questions about Afreximbank’s credit rating and its claims to “preferred creditor status,” which typically protects it from loan losses, Reuters reported.

Sources previously told Reuters that the Paris Club regarded Ghana and Zambia’s loans from Afreximbank and the Eastern and Southern African Trade and Development Bank (TDB) as commercial in nature, meaning they required restructuring. Ghana defaulted on external debts in late 2022, while Zambia did so in 2020.

Zambia’s position is less clear. In October, Zambia’s treasury secretary said a third party had expressed interest in taking over its debt to Afreximbank. Publicly, Afreximbank has maintained that its charter grants it preferred creditor status and shields it from losses.

Ratings agencies have flagged potential consequences. Moody’s, which downgraded Afreximbank in July, said it did not provide an “uplift” for preferred creditor status, noting that any losses could be partially offset by prior provisioning. Fitch, which Afreximbank said it is terminating its relationship with, had previously warned that any weakening of preferred creditor claims could trigger negative rating action.

U.S. investment bank JPMorgan has cut its view on Afreximbank bonds over concerns that the lender’s credit rating could fall to junk if it takes a loss on Ghana’s loans.