Business News of Thursday, 13 July 2017
Government is expected to raise about GH¢17.43bn in treasury securities in the third quarter of 2017, the Finance Ministry has revealed.
Out of the amount, GH¢14.15 billion representing 81 per cent will be used to retire maturing debts.
This will, therefore, not have a significant effect on the public debt stock.
Ghana’s debt stood at GH¢127.1 billion, approximately 62.5 percent of GDP at the end of March 2017.
According to the issuance calendar released by the Finance Ministry, the bills and bonds will be issued via the book building format.
GH¢8.6 billion will be raised from 91-day T bill and GH¢2.4 billion from 182-day T bill respectively. The 91-day and 182-day will be issued weekly.
The 1-Year Note will however be issued bi-weekly through the primary auction, with settlement occurring on first and third Mondays of each month.
The 2-Year Note will also be issued monthly through the primary auction, with settlement occurring on the second Mondays of each month.
The 3- and 5-Year bonds will be issued through the book-building method and settlement on the last Monday of each month. However, the 3-Year target in July, 2017 will be issued through reopening of the 3-Year Bond at a coupon of 18.50 per cent maturing 1st June, 2020.
The Finance Ministry in a statement said the calendar is developed based on the Net Domestic Financing in the 2017 Budget, the domestic maturities and the provisional Medium Term Debt Management Strategy (MTDS) for 2017-2019.
The calendar specifies the aggregate amounts to be raised by instruments in respect of Government’s Public Sector Borrowing Requirements for the period July to September, 2017.
It explained that the government is planning to continue to issue long-term bonds as part of plans to lengthen the maturity profile of public debt. 3, 5 and 15 year bonds are expected to be issued during the third quarter.
Importantly, the 15-year bond will seek restructure existing short-term 91-day bills into long-term 15 year bond to lengthen the maturity profile of government debt.
The statement explained “The 15-Year Fixed Bond in August, 2017 will be a Structured Bond to convert the existing 91-Day Treasury Bills investment by the National Pensions Regulatory Authority (NPRA).”
GH¢2.6 billion is expected to be raised from the 15-year bond.