Government to issue 3-year maturity bond at coupon rate of 20.5%
A three-year cedi denominated bond is set to be issued by government on Wednesday, January 19, 2022.
The senior unsecured bond set to mature on December 30, 2024, comes with a coupon rate or interest of 20.5%.
Per a notice issued by the Bank of Ghana (BoG) on the said issuance, government is seeking to raise some GHS 773 million from the debt issuance.
The bond, the BoG notes, is opened to both resident and non-resident investors.
Bid offers for the bond the Finance Ministry revealed, begins at 9am on Wednesday January 19, 2022 and ends on Thursday, January 20, 2022 at 5pm.
Alongside the issuance of the 3-year bond is also the issuance of a 6-year cedi denominated bond.
The 6-yr cedi denominated bond also opened to both resident and non-resident investors is expected to mature in 2028.
The 6-yr bond issued by government is to raise funds to rollover a 5-year cedi denominated bond which matured this month – January 2022.
Read: Gov’t to make final decision on benchmark value by end of January
Bond market specialists facilitating the issuance of both the 3-year and 6-year bonds are Absa, Databank, Cal Bank, Ecobank, GCB, IC Securities, Stanbic and Black Star.
In recent times, investors have been demanding higher yields on Ghana’s bonds because of the perceived risks in the economy.
The high interest rate on bonds comes on the back of concerns raised by investors about the fiscal outlook of the Ghanaian economy which is characterized by rising debt, arrears and fiscal deficits.
Analysts say both the domestic and external markets have tighten in recent times as global liquidity continues to dry up. Coupled with the fiscal challenges, this is being reflected in higher yields on the market.
Similarly, Central Banks of advanced economies have begun increasing their interest rates.
Overall, this is expected to translate into increased cost of private sector credit and consequently push cost of doing business up.
