Ghana has priced its fourth Eurobond of US$1.0 billion and would issue it at a coupon rate of 10.75 per cent, Mr Seth Terkper, Minister for Finance and Economic Planning, has stated.
“The bond was oversubscribed, with orders exceeding US$2 billion compared to a target of US$ 1.0 billion,” the Minister said in a statement issued to the Ghana News Agency in Accra.
“This represents an oversubscription of more than 100% indicating the high appetite for Ghana’s credit”.
“This oversubscription occurs within a period of high turbulence in emerging and peripheral markets,” the statement said.
The bond was issued after an eight-day Roadshow that took the Ghana team, led by Mr Terkper, and Dr. Henry Kofi Wampah, the Governor of the Bank of Ghana to London, Los Angeles, San Francisco, Boston, and New York.
According to the statement, Mr Terkper said the proceeds would be used for the refinancing of maturing domestic debt.
He reiterated that the bond issuance was in line with Ghana’s new debt management strategy guided by the principle of smoothening the maturity profile and minimising interest burden on the budget.
The statement said:“The bond is a soft amortizing one with tenure of 15 years amortizing in years 2028, 2029 and 2030. The principal will be repaid in three installments of US$333 million in years 2028 and 2029, and US$334 million in 2030.”
The 15-year tenure means that Ghana had become the first sub-Saharan African country outside South Africa to successfully issue a 15-year bond, it said.
The statement said like the three previous issues, this year’s bond attracted investors from the United Kingdom, Europe, the United States, Middle East and Asia.
“Other reasons are: many new investors have participated in the transaction enabling Ghana to expand its investor base; and the World Bank partial guarantee of US$400 million has enabled Ghana to borrow on reasonable terms in a rather difficult market,” said the statement. The statement said the Notes would be listed on the Irish and Ghana Stock Exchanges.
It would be recalled that Parliament approved an amount of up to US$1.5 billion for refinancing of existing debt (US$ 1.0 billion) and for capital expenditure (US$ 0.5 billion). This issue relates to the refinancing of existing debt.
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