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GH500m 3-Year Bond Undersubscribed
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-GH¢303m bids accepted at 24.5%

Ghana accepted GH¢303m worth of bids for a three-year domestic bond and will pay a fixed yield of 24.5 per cent.

The bond, which was open to offshore investors, was undersubscribed, with total bids tendered of GH¢341m, less than the GH¢500 million targeted, officials of Bank of Ghana (BoG) have disclosed Yields ranged between 23.7 per cent and 24.95 per cent and settlement is fixed for May 30.

Proceeds from the sale will be used to roll over maturing bonds as the government makes renewed efforts to tackle its growing debt burden and at the same time provide resources for Ghana's huge infrastructure requirements.

The major commodities exporter is implementing a three-year aid programme with the International Monetary Fund to fix an economy dogged by budget deficits and inflation.

Ghana's total public debt is around 70 per cent of GDP while consumer inflation stood at 18.7 per cent in April. That has raised concerns among investors and donors, including the IMF.

Overall, the government plans to raise GH¢5.5 billion by selling short- and medium-term domestic securities this month, of which GH¢5.23 million will be used to refinance maturing debt, the central bank has said.

Ghana paid a yield of 24.5 per cent on a three-year bond sold last month through a syndicate of banks, with offshore buyers taking up 71 per cent of allotted bids.

Ghana's interest rates are among the highest in the region, reflecting the fiscal challenges facing the economy. The yield on the benchmark 91-day Treasury bill, which is sold on Fridays, was 22.8071 per cent at the last sale on May 20.
Source: Reuters

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