Ghana‘s Government has raised about 2.25 billion dollars through various domestic bond issuance. This constitutes a total of $1.13 billion through the issuance of 15 and 17 year bonds at the same coupon of 19.75%.
A statement released by the Finance Ministry said an additional 1.12 billion dollars in 5 and 10 year bonds was raked in via a tap-in arrangement. The ministry said the issuance which is the largest amount issued in the sub region is an indication of renewed investor confidence in the country.
The pricing obtained was also consistent with the initial price range of 18.95% – 19.85%. The issuance attracted a number of global portfolio investors including a very substantial investment in the 15-year bond by a very well respected global financial investor.
Ghana’s Minister of Finance, Ken Ofori-Atta, stated that the issuance proceeds will be used to repurchase and/or retire a portion of the higher coupon short-term public debt instruments, meaning there will not be an overall increase in the total debt stock.
“This is in line with our liability management strategy which seeks to re-profile our public debt stock, extend tenors, reduce short term rollover pressures, and lower domestic interest cost. Additionally, this issuance will further help improve our foreign exchange reserves by over USD2 billion and further support the cedi” he said.
The Parliament of Ghana last week passed the Appropriation Bill for the 2017 budget, including the landmark re-alignment of statutory funds which frees up about GHS4.5 billion in fiscal space for 2017.
Ken Ofori-Atta said he was pleased by the success of this bond offer.
“this is an indication of the markets’ belief in our commitment to building an effective public financial management system, improve the country’s debt sustainability outlook and mitigate the crowding out of the private sector. It is imperative that we re-profile our total debt stock of USD30 billion which should help put us on a path of ‘Ghana beyond Aid’, Ofori-Atta added.
Source: Africafeeds.com/ Fred Dzakpata
