Government to issue 3-year bond on Thursday

The Government of Ghana through the Bank of Ghana (BoG) would on Thursday, 5 March 2020 issue a three-year cedi denominated bond.

It is, however, unclear how much the country is seeking to raise from this debt instrument, but largely, majority of the funds will be used to settle maturing debts.

The Senior Unsecured instrument will be opened to both Resident Investors and Non-Resident Investors.

Each Bond shall have a face value of GHS1 and the minimum bid is GHS50,000 and multiples of GHS1,000 thereafter.

Absa, Databank, Fidelity, IC Securities and Stanbic Bank are the joint book runners, that are expected to convince investors to purchase the bond.

According to the methodology, all successful bids will clear at a single clearing level discretionary allocation at the single clearing level in event of over-subscription.

The government will this year spend GHS22 billion on interest payments on loans.

The country is, however, targeting GHS67.07 billion as total revenue and grants for this year. Out of this, a substantial chunk will go into wages and emoluments, as well as the cost of servicing debt.

Interest payments on Ghana’s debt increased by 8.97% to 40.71% at the end of the third quarter of 2019.

On 30 September 2018, interest payments alone on loans contracted by the government of Ghana were estimated to have grown to about 31.73%.