Government has hit the domestic bonds market to raise some funds which size is yet to be determined, to help refinance its debt and maturity settlement.
A statement released by the BoG and copied to Citi Business News indicated that the bond will be issued under a five year Treasury Bonds period.
The bond, which is expected to be opened on Tuesday July 19, 2016, will be issued finally on Monday July 25, 2016 in accordance with government securities for July, 2016.
The instrument is to be issued at par, bearing a coupon rate equal to the highest competitive bid accepted at the auction, and shall carry throughout the term of the security.
Though it is not known how much the government intends to raise, the bond, which has a minimum bid of 50,000 cedis and multiples of 1,000 cedis thereafter, shall have a face value of one cedi and shall be governed by the laws of Ghana.
According to the statement, all successful bids will clear at a single clearing level Pro rata allocation.
The statement further indicated that the bond will be opened to Resident Investors and Non-Resident Investors in Ghana and will be listed on the Ghana Stock Exchange (GSE).
The bookrunners will be Barclays, SAS, and Stanbic bank.
Recent bonds by government
On June 23, 2016, government accepted 811.04 million cedis ($208 million) worth of bids for a five-year domestic bond after announcing a similar bond that was yet to be determined.
In all, government agreed to pay a yield of 24.5 percent, slightly lower than the yield at the previous issue.
At the time, total bids tendered at the sale, which was open to foreign investors, amounted to 816.04 million cedis.
Also in March this year, government paid a yield of 24.75 percent on a similar transaction in March.
Finance Minister, Mr. Seth Terkper had earlier stated that government will use cheaper sources of funding to support the 2016 budget and restructure the country’s heavy public debt.
Offshore investors accounted for 61 percent of sales of that bond, which was arranged by book-builders comprising Barclays Bank Ghana, Stanbic Ghana and Strategic African Securities.
Government plans to issue a total of 16.83 billion cedis in short- and medium-term domestic securities in the third quarter.
Of this amount, 14.91 billion cedis would be used to roll over maturing debt.
There are also plans to issue a fifth Eurobond of up to $750 million in coming weeks
By: Norvan Acquah- Hayford/citibusinessnews.com/Ghana