Cabinet approves $1 billion Eurobond auction

Cabinet, based on anticipated market conditions and financing needs, has approved a Eurobond auction, the transaction size of up to US$ 1 billion.

Per the approval, the lead managers of the transaction are Citi Group and Barclays. The co-managers will be EDC Stock Brokers and Strategic African Securities

Below is a copy of the statement from the Ministry of Finance

Government as part of debt management policy in the 2013 Budget Statement and Economic Policy indicated its intention to extend the maturity profile of the public debt by diversifying her sources of funding for major infrastructure projects and for other specified purposes including tapping the global bond market.

Cabinet approved the constitution of a Transaction Team towards the issue of the sovereign bond comprising the Ministry of Finance and the Bank of Ghana to manage the preparatory activities for the issue.

The Team offered advice leading to the appointment of the following in accordance with the Public Procurement Act:

- Lead Managers - Co-Managers (local investment banks) - International Legal Counsel and - Local Legal Counsel.

Based on anticipated market conditions and financing needs, a transaction size of up to US$1billion was recommended to and approved by Cabinet. It should be noted that the transaction is subject to prior approval by Parliament.

The exact amount is also subject to variations that might be dictated by market conditions and parliamentary approval. The indicative use of proceeds as approved by Cabinet includes:

i. Payment of counterpart funds for capital projects ii. Capital expenditures approved in the 2013 Budget (with priority given to self-financing projects) iii. Refinancing of public debt to reduce the cost of borrowing

Based on the recommendations of the Transaction Team, the following advisors have been selected:

- Lead Managers: Citi Group and Barclays - Co-Managers: EDC Stock Brokers and Strategic African Securities - International Legal Counsel: SN Denton - Local Legal Counsel: JLD & MB Legal Consultancy

The tentative time table for issuing the Bond is July 2013.