Ghana’s first bond for 2016 slightly undersubscribed

cedis-604x330The Bank of Ghana on behalf of government yesterday issued a three year 500 million cedi bond.Proceeds from the bond will be used to restructure government debt and also for maturity settlement.

But government failed to obtain the expected amount.

Total bids received amounted to 426.23 million cedis.

The auction which was open to both foreign and local investors saw international bids totaling only 20 million cedis.

Meanwhile Ghana will pay  a slightly higher yield of 24.75 percent on the bond than the last 3 year bond it issued.

A three-year bond issued in October last year had a 24.5 percent yield.

Industry players had earlier warned the country’s economic woes as well as the implementation of the new income tax law which will see the bond being subjected to the 1 percent tax on interest earned by individuals will lead to a low subscription of the bond and others to be issued later.

Meanwhile government has announced it intends to borrow about 30. 4 billion cedis, in the first half of this year, through bonds, treasury bills and notes.

The move will see government borrow 4 .72 billion cedis in January 2016 alone.

source: citifmonline.com

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