The Government of Ghana (GoG), on Thursday, raised an amount of US$94.64 million in a two-year Euro Bond, which was highly subscribed.
The successful issuance of the bond would go a long way to boost government’s medium term debt management strategy, which, among other things, is focusing on minimising and/or replacing expensive shorter dated instruments with longer dated issuances.
A press release, dated October 17, 2016, and signed by Larry George Botchway, Assistant Information Officer of the Public Relations Unit of the Ministry of Finance, said the issuance of the bond would serve as a positive boost to the development of our domestic debt market, by introducing a new investment instrument for institutional and individual investors.
Read the full details of the press release below:
Government on October 13, 2016 successfully issued a US Dollar denominated bond on the domestic bond market. The 2-year bond, which was highly subscribed, yielded an amount of US$94.64 million at a coupon rate of 6 percent, consistent with the initial price range of between 5.5 percent and 6.5 percent.
On settlement, this 2-year bond becomes one of our country’s lowest yield bonds aside the 2017s which are currently trading at about 5.45 percent and maturing in less than a year.
The offer, which was open to resident investors only, attracted a total of 26 bids with a face value of US$99.64 million.
The proceeds of this bond will form part of the sinking fund (established by Government to repurchase or redeem specified debt) to buy back some of the high coupon instruments on the local and international capital market as part of our liability management strategy. Going forward, Government will explore the advantages that this instrument type presents as an alternative source of funding, to finance the dollar component of future budgets.
The issuance of this bond gives further impetus to Government’s Medium Term Debt Management Strategy, which among others focuses on minimizing and/or replacing expensive shorter dated instruments with longer dated issuances. It also provides a positive boost to the development of our domestic debt market by introducing a new investment instrument for institutional and individual investors.
The successful issuance of the bond evidenced by the generally high subscription and the favorable pricing is a reflection of the returning confidence in the Ghanaian economy and further confirms Ghana’s bright medium term prospects. END (Signed)
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