Rand Merchant Bank (RMB), the corporate and investment banking arm of FirstRand Bank Limited, has expressed pride with regards to its role in assisting the Government of Ghana (GoG) successfully issue its $3 billion four-tranche Eurobond on the international capital market.
In what is described as Africa’s largest Eurobond issuance since the onset of the Covid-19 pandemic, RMB acted as Joint Lead Manager and Joint Bookrunner (JLM) on the multi-tranche Eurobond which includes the Zero Coupon Senior Unsecured Eurobond, the first of its kind by an Emerging Market (EM) sovereign, as well as the Dealer Manager on Ghana’s Tender Offer on its 2023 maturity Eurobonds.
Commenting on the transaction, James Formby, Global CEO of RMB, stated; “Ghana has always been a trailblazer as an issuer in the capital markets and was the first Sub Saharan African Sovereign to issue a 40-year Eurobond. RMB is delighted to have been appointed by Ghana to jointly lead the execution of this Eurobond, especially the novel Zero Coupon tranche. The appointment of RMB as Joint Lead Manager and the successful outcome of the transaction can be attributed to RMB’s commitment to Ghana through our on the ground presence, and the continuous investments we have made in our global credit distribution platforms.”
Adding the successful issuance further demonstrates the RMB Debt Capital Markets Team’s expertise, innovation and ability to execute amidst volatile market backdrop.
Speaking also about the issuance was Dominic Adu, CEO of First National Bank Ghana, who said, “Our agility in turning around the transaction within a short period enabled Ghana to navigate the choppy waters in the markets and achieve the government’s objectives in terms of their debt management strategy. The services of RMB’s leading Debt Capital Markets Team, based in London, a key financial hub, remains available to African issuers to help them direct capital into the continent for investment, growth and development.”
The issuance enables the Ministry of Finance to raise funds to refinance more expensive shorter-dated debt with more affordable term debt. The issuance was preceded by a 3-day virtual deal roadshow, where Ghana presented its impressive credit story to global fixed income investors, whilst emphasising government’s focus on fiscal consolidation, completion and continuity as the economy revitalises from the impact of the pandemic.
Ghana’s 2021 $3 billion Eurobond issuance on the international capital market was oversubscribed two times.
The oversubscription of the bond valued at $6 billion, marked the successful debut of the $3 Eurobond and made Ghana the first Sub-Saharan country to issue a Eurobond since the advent of the Covid-19 pandemic.
The successful issuance of the Eurobond, according the Ghana’s Finance Ministry, is testament of renewed investors’ confidence in the Ghanaian economy.
The debt issuance comprised of four tranches – $525 million 4-Year Zero Coupon, $1 billion 7-year Weighted Average Life (WAL) priced at 7.75%, $1 billion 12-year WAL at 8.625% and $500 million 20-year WAL with a coupon of 8.875%.
As earlier noted, funds raised from the issuance will be used to conduct liability management on both earlier issued external and domestic bonds as well as finance the budget deficit.
First National Bank Ghana is a subsidiary of South Africa’s FirstRand Group which is the largest bank by market capitalisation listed on the Johannesburg Stock Exchange – Africa’s largest bourse.
First National Bank Ghana has a total of 11 branches in the three key regions in Ghana and is determined to bring its reputation of innovation and superior products to Ghanaians.
The bank, headquartered in South Africa, also has a presence in Namibia, Botswana, Swaziland, Lesotho, Mozambique, Zambia, Kenya, Angola and Tanzania
