First ever 20-year T-Bond to be issued this week

Government has announced the issuance of 20-year treasury bonds this week, which will be the country’s longest tenured cedi denominated treasury bonds ever issued on the domestic market.

The issuance process will begin with the release of an initial pricing guidance on Tuesday, August 20, 2019, and this will end on Thursday, August 22, 201, when the book-build is expected to close at 2:30 pm, with the final pricing and allocation being made.

This is according to a statement from the Ministry of Finance (MoF) on Thursday, August 15, 2019.

The Bonds will mature in 2039.

Per the government’s debt issuance calendar, an amount of GHc 450 million is expected to be raised from this once-off 20-year bond issuance, which is not only the first of its kind but also the only one scheduled so far.

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

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, August 26, 2019.

Government aims to build benchmark bonds through the issuance of the different instruments, including the 20-year bond which will be issued once this month through the book-building method.

In the June to August, 2019 issuance period, government plans on 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.