{"id":410707,"date":"2017-08-09T10:02:30","date_gmt":"2017-08-09T10:02:30","guid":{"rendered":"https:\/\/ghana-mma.com\/2017\/08\/09\/govt-considers-2018-eurobond-issue-to-raise-1billion\/"},"modified":"2017-08-09T10:02:30","modified_gmt":"2017-08-09T10:02:30","slug":"govt-considers-2018-eurobond-issue-to-raise-1billion","status":"publish","type":"post","link":"https:\/\/www.ghanamma.com\/2017\/08\/09\/govt-considers-2018-eurobond-issue-to-raise-1billion\/","title":{"rendered":"Gov’t considers 2018 Eurobond issue to raise $1billion"},"content":{"rendered":"

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Government is considering\u00a0issuing a Eurobond in 2018 to raise $1 billion as\u00a0outlined in its\u00a0medium term debt management strategy document for the next two years.<\/p>\n

Reasons for Eurobond sale<\/b><\/p>\n

According to government sources, the planned Eurobond sale is part of several options being considered to help finance the budget deficit which government has revised to 6.3 percent of GDP and \u00a213.2 billion\u00a0on cash basis.<\/p>\n

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JOYBUSINESS understands details of the Eurobond sale could be announced in the 2018 budget which would be presented to Parliament in November this year.\u00a0<\/p>\n

If government goes ahead with this auction, it could be this administration\u2019s first with Eurobond sale and possibly the 6th by the country.\u00a0<\/p>\n

Concerns with the Eurobond sale<\/b><\/p>\n

The country paid about 9.25 percent as interest on its last Eurobond issued to raise some $750 million.<\/p>\n

There are fears that studying\u00a0current developments on the international market and the decision by US Federal Reserve to hike rates,\u00a0the country could be paying more if it finally goes ahead to issue this bond.<\/p>\n

However, analysts like Mike Cobblah who is also the country director for\u00a0 investment firm C_Nergy Ghana does not think that the country is not in a good position to issue the bond.\u00a0<\/p>\n

He tells JOYBUSINESS the current economic fundamentals have witnessed some improvement could reduce the cost that could come with this Eurobond issue.<\/p>\n

Government\u2019s debt management strategy<\/b><\/p>\n

According to the debt management strategy document, government envisaged an increase in non-resident investor participation in the domestic bond market.\u00a0<\/p>\n

The strategy is to assume a three year zero coupon bond this year and some $1 billion investments in a 10 and 15-year bond and continuous issuance of some medium term bonds like three, five and seven-year bonds.<\/p>\n

All these issuances would be guided by borrowing at the very low cost and as well as develop the domestic bond market.<\/p>\n

The document outlines strategies aimed at reducing the public debt in relation to the total value of the economy to 70 percent from 73 last year.\u00a0<\/p>\n

The document also added that government would be looking at using the book building approach to encourage investor participation in longer dated instruments<\/p>\n

Interest rate risk benchmark<\/b><\/p>\n

Government in the document noted that it does not see an eminent risk for the debt portfolio saying, \u201cover the medium term, that share of floating\u00a0rate debt\u00a0in the total\u00a0external debt is expected to be within the range of 20-25\u00a0percent\u201d.\u00a0\u00a0<\/p>\n<\/div>\n

\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\u0642\u0627\u0644\u0628 \u0648\u0631\u062f\u067e\u0631\u0633<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Government is considering\u00a0issuing a Eurobond in 2018 to raise $1 billion as\u00a0outlined in its\u00a0medium term debt management strategy document for the next two years. Reasons for Eurobond sale According to government sources, the planned Eurobond sale is part of several options being considered to help finance the budget deficit which government has revised to 6.3 […]<\/p>\n","protected":false},"author":0,"featured_media":410708,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-410707","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business"],"yoast_head":"\nGov't considers 2018 Eurobond issue to raise $1billion - Ghanamma.com<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.ghanamma.com\/2017\/08\/09\/govt-considers-2018-eurobond-issue-to-raise-1billion\/\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"Gov't considers 2018 Eurobond issue to raise $1billion - Ghanamma.com\" \/>\n<meta name=\"twitter:description\" content=\"Government is considering\u00a0issuing a Eurobond in 2018 to raise $1 billion as\u00a0outlined in its\u00a0medium term debt management strategy document for the next two years. 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