From September to November 2019, government plans to issue debt securities worth a gross amount of GHc 14,337.87 million from the domestic public debt market.
Of this amount, GHc 13,645.56 million is to rollover maturities and the remaining GHc 692.31 million is fresh issuance to meet Government’s deficit financing requirements.
This is contained in government’s issuance calendar for September to November 2019, released on Wednesday by the Ministry of Finance.
The target gross amount to be issued over the next three months represents a 38.5 percent increase compared to the targeted gross amount during the June to August issuance period. This remains the highest issuance target made so far in the year.
Domestic portfolio investors will have the opportunity to invest up to GHc 7,700 million in short term government debt securities with tenors of less than two years, 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.
The remaining portion of the securities of GHc 6,587.87 million, comprising debt securities with tenors from two years up to 20 years, would be made available to non-resident investors as well, who tend to dominate subscriptions of such medium to long-term issuances to date.
The calendar is based on the Net Domestic Financing provided in the 2019 Budget, the domestic maturities and the Medium-Term Debt Management Strategy (MTDS) for 2019-2022.
The Calendar also 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.
Per this calendar, government aims to issue weekly the 91-day and 182-day bills, whereas the 364-day bill will be issued bi-weekly, through the primary auction with settlement being the transaction date plus one working day.
For securities of two-years up to seven-years, government will issue them through the book-building method.
An amount of GHc 700.00 million for the 5-year bond will be issued in October, 2019, whereas in November 2019, GHc 700 million is expected to be raised through re-opening of existing seven-year bonds (Tender 1585), maturing on April 7, 2025.
An amount of GHc 287.87 million in 20-year bonds, to be issued as a shelf offering, will be re-opened based on investors request and on market conditions, the statement said.
From the Central Securities Depository (CSD) monthly bulletin, at the end of July 2019, government has made a total of GHc 9,152 million from reopening of existing issuances, whereas new securities issued for the period was about GHc 24,508 million.
Consistent with the MTDS, government indicates that it may announce other tap-ins/reopening of existing instruments depending on market conditions.