Maiden 10-year bond fetches Ghana GHS438m at 19% interest

A woman holds 03 July 2007 in Accra a wad new currency, the new cedi, that Ghana put in circulation that day, although the old money will still be valid until the end of the year. Currently, the cedi is one of the least valued currencies in Africa: 9000 cedis equal one US dollar. Ernest Addison, head of research at the Bank of Ghana, assured in November 2006 that the changeover was not a revaluation nor devaluation, and will not affect foreign exchange. AFP PHOTO / ISSOUF SANOGO (Photo credit should read ISSOUF SANOGO/AFP/Getty Images)

Government has raised 438 million cedis ($110 million) worth of bids for its first 10-year domestic bond issued today at a cost of 19 percent.

The bond which will mature in 2026 was also opened to foreign investors. Citi Business News has gathered that the bond drew bids of 726 million cedis, far more than the initial 200 million cedi targeted by government.

By this, the bond was oversubscribed by over 200 percent.

The arrangers were Barclays Bank, Stanbic Bank Ghana as well as brokerage firm Strategic African Securities.

Government announced that the proceeds will be used to retire maturing debt as well as invest in infrastructure development.

Finance Minister Seth Terkper had earlier told Citi Business News the move was aimed at issuing long term security to help manage the debt stock.

As at May 2016, total public debt was 63 percent of Gross Domestic Product and is expected to rise to around 70 percent by the end of the year on planned expenditure.

 

Source: Citifmonline