GOVERNMENT is set to issue a 5-year bond that is expected to mature in 2024.
According to an issuance statement by the Bank of Ghana (BoG), the minimum bid is GH₵50,000 and in multiples of GH₵1000 thereafter. It is however unclear how much government will be raising.
The debt instrument which is unsecured will be largely used to finance capital investments and settle interest payments on loans taken earlier. It will be opened to both resident investors and non-resident investors.
Importantly, the amount of bids to be made will determine the yield. Interest will be paid semiannually until maturity.
Barclays Bank, Databank, Fidelity Bank, IC Securities and Stanbic Bank are the sponsoring brokers.
For the issue methodology, all successful bids will clear at a single clearing level while a discretionary allocation at the single clearing level in the event of oversubscription.
According to the Bank of Ghana Summary of Economic and Financial Data, Ghana’s public debt stock hit GH¢173 billion in December 2018, about 58 percent of GDP of 58 per cent.
This the International Monetary Fund (IMF) cautioned will push the nation’s total debt stock to 62 percent of GDP by end year 2019.
According to the 2018 budget, GHc¢18.6 billion will be used to settle interest payments on loans. Of this amount, domestic interest payments will constitute about 77.8 percent (GH¢14.504 billion) while the remaining GH¢5.096 billion will be used to settle external interest.
In second quarter of 2019, the government plans to raise GHȼ12 billion, of which GH¢11.533 billion is to settle maturing funds and the remaining GH¢566.06 million is finance government’s project
Credit: The Finder
(By Augustine Amoah)