It appears government will not back down on moves to issue an Eurobond this year [2016].
Government has been forced to put on hold issuing of the Eurobond a number of times because of current unfavorable market conditions.
It was forced to put on hold the launch last month [August] after investors quoting interests much higher than government had expected.
Interest for the last Eurobond issued last year [October, 2015] which was backed by a World Bank guarantee of 400 million dollars was 10.75 percent, the highest attracted so far.
The high interest rate being demanded by investors have been attributed to the country’s current economic challenges as well as high debt levels.
But government officials are optimistic Ghana’s current program with the IMF the Extended Credit Facility, which has led to a lot of restructuring in the management of the economy and also the coming on board of the TEN oil field will inspire investors to patronize and attract a much lower interest rate for the Eurobond.
Government’s inability to issue the Eurobond will have dire consequences since proceeds from the Eurobond will be used to retire the first Eurobond which matures next year [2017].
A statement from the Finance Ministry, signed by its acting Chief Director Patrick Nomo and copied to Citi Business News said, ‘Following from our prior road show in August 2016, when we indicated that we would continue to monitor markets with a view to a potential new Eurobond issue and our subsequent completion in early August 2016 of a US$100 million tender offer in respect of Ghana’s Eurobonds due 2017, we have today announced a prospective new Eurobond issue and any and all tender offer in respect of the outstanding Eurobonds due 2017’.
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By: Vivian Kai Lokko/citibusinessnews.com/Ghana
