A delegation led by the Finance Minister Ken Ofori-Atta on Tuesday, February 4, 2020, completed the issuance of a US$3 billion Eurobond in three installments with interest rates better than what was realized in similar bonds issued last year.
The three-tranche bond was sold with 7-year, 14-year, and 41-year maturities.
A member of the delegation who spoke to Citi Business News explained that the government accepted US$1.25 billion for the 7-year-bond at a coupon rate of 6.375 percent.
This compares favourably to an exact tenor bond government issued in 2019 with a coupon rate of 7.875 percent.
Also, the government was successful in securing US$1 billion with a maturity period of 14 years at a rate of 7.75 percent. This rate also trumps the 8.125 percent the government accepted for a 12-year bond issued as part of the 2019 Eurobond.
The last of the three bonds issued was a 41-year bond, which happens to be the longest dated bond issued by an African country. The government accepted to borrow US$750 million at a rate of 8.75 percent for the longest dated bond which matures in 2061.
The yield for the longest-maturity instrument dropped from the initial guidance of 9.125% and is the highest-yielding sovereign Eurobond of the year so far.
Prior to the 41-year bond, the longest tenor bond issued by an African country was a 31-year bond with a coupon rate of 8.95 percent also issued by Ghana in 2019.
Although government set out to borrow US$3 billion in its eighth Eurobond appearance, it received offers to the tune US$15 billion – reflecting investors’ appetite for Ghana’s bond
The proceeds from the bond issuance are expected to be used for refinancing of some maturing debts with the rest committed to provided infrastructure.