ESLA Plc issues 12 year bond worth Ghs 2.2 billion
Government is seeking to raise some Ghs 2.2 billion in the issuance of a 12 year maturity-dated bond.
Government, making the issuance through the Special Purpose Vehicle (SPV), ESLA Plc, indicated to prospective investors in a notice on Wednesday, September 22, that the issuance has a minimum and maximum target of GH¢500 million and GH¢2.2 billion respectively.
The 12-year bond was issued with a fixed-rate of 19.75% to 20% per annum and will due on September 9, 2033.
The offer was opened to investors on Friday, September 17, 2021, and settlement will be reached on Friday, September 24, 2021; with bonds credited to Central Securities Depository (CSD) accounts of successful paid-up investors.
As part of the reforms in the energy sector, E.S.L.A Plc was established as a Special Purpose Vehicle (SPV) to issue long-term bonds backed by ESLA receivables to resolve energy sector debts of almost GH¢10.0 billion owed to banks and trade creditors.
The 2020 annual report on the management of the energy sector levies and accounts projects that ESLA proceeds in the next four years to averagely increase at 12 percent per annum, from 2021 to 2024.
The 2021 levy is estimated to increase by GH¢634.77 million at 12.0 percent, compared with 2020. The indicative projections for the other years-2022, 2023, and 2024-show an average growth of 12.0 percent compared with the respective previous year’s forecast.
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Growth in levies is largely envisaged to contribute to the reduction in the financing challenges facing the energy sector, as well as support the Road Fund and Energy Commission in delivering on their mandate.
Since the inception of ESLA Plc to the end of January 2021, a total of GHS 3.881 billion has been paid as interest payment for the benefit of bondholders of tranches of E1 to E4 bonds. The company in 2020 made the required coupon payments of GH¢1.30 billion to its bondholders. Funds in excess of its immediate obligations were transferred to the lockbox in accordance with the requirements of the bond programme and invested in permissible investments.
Currently, ESLA Plc has an outstanding issuance of about GH¢7.63 billion, representing a total issuance of GH¢ 8.294 billion, out of which approximately GH¢664 million was redeemed in a buyback transaction finance with funds from the company’s lockbox account.
