Treasury bill subscriptions go up despite debt restructuring, targets GH¢1.816 billion this week

Subscriptions for government treasury bills went up last week despite the announcement of a debt restructuring programme.

Results from the latest auction from the Bank of Ghana held on December 1, 2022, showed GH¢2,748.57 million bids were accepted.

Interest rates stood at 36.1% for 91-day T-bills and 182-day T-bills stood at 36.7%.

The bids tendered for the 91-day T-bills were estimated at ¢2.066 billion. All the funds were accepted at an interest rate of 36.1%, about a 0.56% increase from last week's bids.

All bids were accepted, making it the third consecutive week that the treasury bills have been over-subscribed.

However, the government expects to obtain GH¢1.816 billion in its next auction.

Reports have suggested that due to the debt exchange announcement by the government, investors are leaning towards short-term securities causing growing interest.

Announcing the debt exchange program on December 5, 2022, the finance minister said “As already announced, Treasury Bills are completely exempted, and all holders will be paid the full value of their investments on maturity. There will be NO haircut on the principal of bonds. Individuals who hold bonds will also not be affected at all.”

He also explained that the exchange programme which included consolidating all existing bonds into four bonds and extending all bonds as of December 1, 2022, to now mature in 2027,2029,2032, and 2037.

Coupon payments associated with this debt exchange programme are 0% in 2023, 5% in 2024, and 10% from 2025 till maturity.

Meanwhile, market watchers are optimistic that the exemption of Treasury bills will make it more attractive and help in boosting investor confidence.


SSD/FNOQ