Government will from today re-open the two-year Treasury Bond tap issuance, which will mature in January 2021.
The bonds will be issued with each having a face value of GHc1, with a minimum subscription of GHc 50,000 and multiples of GHc 1,000 thereafter. The offer will be open to both local and foreign investors.
An amount outstanding of GHc 378.04 million will be issued at a coupon rate of 19.75 percent.
All bids are expected to be received by midday of Thursday, January 17, 2018. To this end, successful bidders will be allocated at the price at which they bid, whereas partial allocations will be made to bids at the cut-off price at the issuers discretion in the event of oversubscription.
Per its issuance calendar, Government aims to build benchmark bonds through the issuance of the different instruments, including the Two-Year Note which will be issued once a month through the book-building method.
The two-year notes would be issued through Barclays Bank, Databank, Stanbic Bank, Fidelity Bank and IC Securities acting as book runners for government.
Towards the tail end of 2018, the market showed stronger interest in the bonds issued by the government than what it was willing to sell. For instance the results of the tender held on December 6, 2018 indicate that, of the GHc 714.5 million worth of bids that were tendered, only GHc584.51 million was accepted.
According to the public debt calendar for the first quarter of 2019, issued by government last week, two year bond issuances, open to foreign as well as local investors will be issued to the tune of GHc1,000 million in January, GHc400 billion in February and another GHc400 billion in March, totaling GHc1,800 million.
Medium-Term Debt Management Strategy
Under the 2019 debt strategy, which is expected to be a continuation of the strategy implemented in 2018, government would issue an annual borrowing and recovery plan for 2019 in line with section 60 (5) of the Public Financial Management (PFM) Law.
By Joshua W. Amlanu