Business News of Sunday, 18 September 2016
Information gathered by Citi Business News indicates that government has commenced meetings with local investors to raise its first dollar denominated bond locally.
The Finance Minister, Seth Terkper met the investors in Accra last Friday to convince them invest in government’s upcoming $100 million bond this month. The bond, if successful will be used to restructure maturing debts as well as infrastructure development.
Earlier this month, government announced that it plans raising about GH¢25 billion through bonds and treasury bills for the rest of year. The announcement was a revised issuance calendar indicating government’s plan of borrow from August to December.
The report showed that about Gh¢24 billion of the funds raised will be used to clear previous bonds issued that are maturing, with the remaining going to support fresh commitments. As part of the plans, a three-year bond will also be issued in November to raise GH¢700 million while it hopes to issue its first 10-year local bond of GH¢200 million.
According to government, the calendar aims at continuing the objective of lengthening the maturity profile by reducing short-term borrowing. It adds that the 3, 5, and 10-year issues will be done per the calendar through the book-building method with settlement on the last Mondays of each month.
The amount of GH¢400.00 million for the 5-year bond in August 2016 will be raised through reopening of the existing 5-year bond (coupon of 24.75%) maturing July 19, 2021, with settlement on August 29, 2016.
The 5-year bond of GH¢1,000.00 million in September 2016 may be issued partly in a US Dollar equivalent bond, with settlements on September 12, 26, 2016 for the cedi and US dollar bonds, respectively.