In the second quarter of 2019, government plans to raise a total of GHc 12,100 million from the domestic market, representing a 19.2 percent increase over the amount targeted in the first quarter of GHc 11,250 million.
This is contained in government’s issuance calendar for the second quarter of 2019, which was released Monday by the Ministry of Finance.
Of the total gross amount, GHc 11,533.94 million is to rollover maturing debt and the remaining GHc 566.06 million is fresh issuance to meet government’s financing requirements and thus amounts to new public debt.
Domestic portfolio investors will have the chance to invest up to GHc 7,950 million in the debt securities which are not open to foreign investors.
This amount comprises debt securities with tenors of 91 days, 182 days and 364 days to be issued during the period, all of which are reserved strictly for domestic investors.
However, the amount in this quarter falls short of the GHc 8,250 million that was made available strictly to local investors in the first quarter.
The remaining portion of the securities of GHc 4,150 million, comprises debt securities with tenors from 2 years up to 15 years, would be made available to non-resident investors as well, who have tended to dominate subscriptions of such medium term issuances to date.
The calendar is based on the Net Domestic Financing in the 2019 Budget, the domestic maturities and the Medium Term Debt Management Strategy (MTDS) for 2019-2022.
Gross Borrowing Requirement for the Period
The largest segment of the debt securities issuance for the first quarter of this year will be in the form of 91-day treasury bills amounting to GHc4, 300 million of which GHc1, 400 million will be issued in April, the same amount in May and GHc1, 500 million in June.
Issuance of 182 day bills will amount to GHc2, 900 million comprising GHc 900 million in April, GHc 950 million in May and GHc1, 050 million in June.
For 364 day treasury notes, which has replaced the erstwhile one year notes, GHc 250 million will be issued in April, GHc 250 million in May and GHc 250 million in June.
Two year bond issuances, open to foreign investors as well as local investors will be issued to the tune of GHc 600 million in April only.
Three year bond issuances will total GHc 800 million in May. The five year bond issuance will take place in April to the tune of GHc 1, 000 million. All of these will be opened to foreign as well as domestic investors.
GHc 500 million will be raised through the six year bond issuance in May, whereas GHc 800 million will be raised in June through 10 year bond issuance. The 15 year bond issuance will total GHc 450 million in June.
Both the 91 day and 182 day Treasury bill issuances will be done weekly by auction, while the 364 day issuances, also sold by auction will be bi-weekly. The one year, two year, three year and five year instruments will be sold using the book building approach.
The calendar takes into consideration government’s liability management programme, market developments, both domestic and international and the treasury and debt management objective of lengthening the maturity profile of the public debt.
By Joshua W. Amlanu