Government on last week Thursday, closed the issuance of a six-year Treasury bond through the Ghana Stock Exchange, with maturity in 2025.
This issuance replaces the five-year Treasury Bond issuance originally scheduled for February 2019,as stated in the Ministry of Finance’s Issuance Calendar for 1st Quarter 2019.
The bonds issued each have a face value of GHc 1, with a minimum subscription of GHc 50,000 and multiples of GHc 1,000 thereafter. The offer was opened to both local and foreign investors.
An amount of GHc 600 million in the bonds was expected to be issued for this particular medium/long-term bond issuance. However, according to the issuance calendar for this month, Five-Year Bonds would have been issued subject to market conditions.
The shift in the maturity period for this bond follows moves by the Bank of Ghana (BoG) to steepen the yield curve on financial assets, securities and loans inclusive, by exerting downward pressure on short term interest rates while at the same time leaving longer term interest rates to rise.
All successful bids will clear at a single level discretionary allocation at the single clearing level in the event of over-subscription.
This particular issuance will be the only time that a six year T-Bond is issued for the first quarter.
The six-year bond would be issued through Barclays Bank, Databank, Stanbic Bank, Fidelity Bank and IC Securities acting as book runners for government.
In addition to this issuance, there would be a total of GHc 2,500 million that would be raised on the bond market including the 91-day and 182-day Treasury Bills which will be issued weekly and a 364-day bill issued on a bi-weekly basis through the primary auction, as well as the 2-Year Note once in the month.
Overall, for this quarter, Government plans to issue a gross amount of GHc 11,250.00 million, of which GHc 10,149.84 million is to rollover maturities. The remaining GHc 1,100.16 million is to meet Government’s financing requirements and buffer for the period.
Medium-Term Debt Management Strategy
As part of 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