15-year T-Bond issuance opens today

Government has announced that the process for the issuance of 15-year treasury bonds will start today, with the opening of the book-build.

This follows release of an initial pricing guidance for the issuance of the bonds through the Ghana Stock Exchange.

This is according to an announcement made by the Ministry of Finance (MoF) on Monday, July 22, 2019.

The Bonds will mature in 2034.

Per the government’s debt issuance calendar, an amount of GHc 300 million is expected to be issued for this once-off 15-year bond issuance, which takes place in July.

Each bond to be issued shall have a face value of GHc 1, with a minimum subscription of GHc 50,000 and multiples of GHc 1,000 thereafter. The offer will be opened to both local and foreign investors.

The 15-year bond would be issued through Barclays Bank, Databank, Stanbic Bank, Fidelity Bank and IC Securities acting as book runners for government.

Books are expected to be closed midday on Thursday, around 2:30 pm, with the final pricing and allocation determined.

Successful bids will be cleared at a single clearing level. However, in the event of oversubscription, there will be a discretionary allocation at the single clearing level. Investors are expected to be settled or issued with the bonds on Monday, 29, 2019.

Government issued its first ever 15-year cedi denominated bonds in April 2017 in an issuance that eventually became controversial with the political opposition accusing the then newly installed government of not abiding by established rules in a bid to enable certain investors corner the bonds up for sale. Eventually nothing substantial came of subsequent investigations by authorities in Ghana and the United States.

Currently 15 years are the longest tenor for cedi denominated bonds although government has scheduled the first ever 20-year bond issuance for August this year through which it plans to raise GHc450 million.

Government aims to build benchmark bonds through the issuance of the different instruments, including the 15-year bond which will be issued once this month through the book-building method.

In the June to August, 2019 issuance period, government plans of raising a total GHc 10,350 million from the domestic market, of which GHc 9,873.37 million is to rollover maturities and the remaining GHc 476.63 million is fresh issuance to meet Government’s financing requirements.