Government clarifies reduction in EUROBOND proceeds to the country

Government clarifies reduction in EUROBOND proceeds to the country

Kweku Ricketts-Hagan

Government says the country is receiving 750 million dollars from recent EUROBOND because it had to use the remainder to pay off some participating investors it owed.

750 million dollars is set to hit government’s accounts by August 7, though it raised 1 billion dollars.

The Bloomberg News website for instance is reporting that Ghana would issue another 250 million bond to make up for the difference.

Some people who have been following the deal say this shows that the country did not actually raise the 1 billion dollars as reported.

But Deputy Minister of Finance, Kweku Ricketts-Hagan does not share this view.

“When you consider that the Bond issue that we had in 2007 was 8.5, the one that we have gone for has a coupon rate of 7.875 that is a difference of about 6.25 when you take it in dollar terms or cash terms that works out to about 1.5 million dollars a year, when you multiple it by the four years we have got for the old bond to mature that is a savings of over 6 million.”

He adds that the country is making some savings despite paying investors an interest of 8 percent.

Meanwhile, Lead Managers for the country’s second Eurobond, CITI bank have rejected assertions that the country is paying too much for the bond issuance.

The country is expected to pay persons who bought the bond, an interest of 8 percent. This is slightly higher than the 6.5 percent Nigeria had in a similar move and Rwanda’s 6.8 percent.

This has seen some analysts describing the international bond as bad and expensive.

But Vice President of CITI Bank, Nicholas Samara strongly disagrees.

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