Gov’t targets up to $100 million for historic domestic dollar bond

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Government is looking at raising up to $100 million from its historic domestic dollar bond.

The sale of the first dollar-denominated bond for local investors begun on October 3 and it’s expected to close on October 13, 2016.

Sources say government is looking at paying investors 3 to 6 percent as interest on this two-year dollar bond, however, the price could change when the transaction closes on October 13.

JOYBUSINESS is learning that even though the $100 million is the target, government could settle for $50 million.

Government has maintained that it hoping to use proceeds from the auction to meet some of its dollar commitment.

However, some analysts are of the view that, government wants to tap into the huge dollar deposits in the bank system and also the favourable interest that it will be paying compared to borrowing outside.

This could come through the Eurobond, which is likely to pay between 8 to about 11 percent and about 21 percent on cedi denominated bonds.

The deal is being managing by three financial institutions; Barclays, Stanbic Bank and finance house SAS.

Some analysts are of the view that issuing dollar-denominated bonds just for domestic investors could bring some pressure on the cedi.

 

Source: myjoyonline