Business News of Thursday, 22 March 2018
Government secured more than what it targeted in today’s three-year bond sale. It was looking for 900 million cedis but got GHC1.575 million cedis.
Investors who bought into the offer would be paid an interest of 16.5 percent.
This is a little lower than what it paid investors that participated in last September’s three-year bond sale. The settlement would be done on Monday, March 26.
The auction was done through the book building approach which brought together three banks and two finance houses to raise the funds.
The Government is hoping to use funds raised from this bond to finance some projects outlined in the 2018 budget.
It is not clear for now whether the proceeds from this bond would go a long way to stabilize the Ghana cedis, that is if most of the investors that participated came from outside the country.
Confidence in economy
Speaking to JoyBusiness, Michael Cobblah, Country Director of C-NERGY said the development is a sign of confidence in the economy.
He said, “It means that investors have rewarded the managers of the economy because you realise that the rate has dropped from last year of 17.5 to about 16.5. So it’s largely successful. I believe, probably if we had targeted the original 900 million we wanted to raise, we couldn’t even have ended at a rate of about 15.5. So it shows some confidence from investors on the managers of the economy.”
Mr Cobblah added, “I won’t say it’s not normal, if you go to the market, you are able to raise money at a cheaper rate than you expected because there is a window of opportunity.
So you grab as quickly as you can so that subsequent ones when the market condition is clean, at least, you could have cushioned yourself in the original bumper that you’ve made.”
For instance, if you have a programme so much within the year and you almost double what you made in the first quarter, you can decide in the second quarter you are not taking any money at all,” he said.