…as it raises US$ 2 billion sovereign bond
Ghana has raised a total of US$ 2.0 billion from its 2018 sovereign bond issuance which was concluded on Thursday, as it extends its international capital market funding to 30 years for the first time.
The 10-year bond raised US$ 1.0 billion at 7.627 percent, while the maiden 30-year bond raised another US$ 1.0 billion at 8.627 percent.
According to a release from the Ministry of Finance, the issuance of this bond indicates a strong investor confidence, as it is the first time a sub – Saharan African (SSA) country with a rating of B Stable has priced a sovereign bond at such a low cost.
Demand for the country’s credit peaked in excess of US$ 8.0 billion, representing an over subscription of three times the targeted amount.
US$ 750 million of the issuance represents new debt, while a portion of the remainder will be used to swap for more expensive existing Eurobonds, as well as other liability management operations.
Early this year, Finance Minister, Ken Ofori-Atta indicated government would raise about US$ 1.5 billion from the international market, for which the International Monetary Fund (IMF) pressed on government to cut the target to US$500 million to control the country’s debt stock.
It must be noted that despite the size, US$ 1.25 billion which would be used for liability management, would not add up to the debt stock of the country as it is debt neutral.
In the 2018 budget, government planned of raising US$1 billion to support its infrastructural plans and also pay maturing debts.
By Joshua W. Amlanu