The Ministry of Finance has raked in an amount of $2.25 billion through the issuance of bonds.
The ministry on Monday, 3 April successfully issued 15 and 7-year bonds with the same coupon of 19.75%, raising a total amount of $1.13 billion.
In addition, the finance ministry raised the cedi equivalent of $1.12 billion in 5 and 10-year bonds via a tap-in arrangement. \u201cThese activities raised a total of $2.25 billion and resulted in the lengthening of the maturity profile of the instruments available on the domestic market. This issuance represents the largest amount issued by a sub-Saharan African country in a day,\u201d a statement from the ministry indicated.
The money raised would not necessarily add to Ghana\u2019s debt profile but rather be used to offset part of the existing debt and also for infrastructure development.
According to the statement, the pricing obtained was also consistent with the initial price range of 18.95% \u2013 19.85%.
\u201cThe issuance attracted a number of global portfolio investors, including a very substantial investment in the 15-year bond by a very well respected global financial investor,\u201d it stated.
The bond sale was managed by three financial institutions \u2013 Barclays, Stanbic Bank and Strategic African Securities SAS.
The Minister of Finance, Ken Ofori-Atta, stated that the issuance proceeds will be used to repurchase and\/or retire a portion of the higher coupon short-term public debt instruments, meaning there will not be an overall increase in the total debt stock.
\u201cThis is in line with our liability management strategy which seeks to re-profile our public debt stock, extend tenors, reduce short term rollover pressures, and lower domestic interest cost. Additionally, this issuance will further help improve our foreign exchange reserves by over $2 billion and further support the cedi.
\u201cThis successful bond issuance and the significant amount raised, especially the longer tenor 15-year, is an indication of the strong appetite for Ghana Bonds due to the markets\u2019 renewed confidence in the long term prospects of the Ghanaian economy and a major vote of confidence in the new government\u2019s economic policies, fiscal measures and programmes as outlined in the 2017 Budget,\u201d the statement explained.
The ministry was also happy that on Friday parliament passed the Appropriation Bill for the 2017 budget, including the landmark re-alignment of statutory funds which free up about GH\u00a24.5 billion in fiscal space for 2017.
\u201cThe ministry of finance is pleased by the success of this bond offer,\u201d according to the finance minister. \u201c\u2026This is an indication of the markets\u2019 belief in our commitment to building an effective public financial management system, improve the country\u2019s debt sustainability outlook and mitigate the crowding out of the private sector. It is imperative that we re-profile our total debt stock of USD30 billion which should help put us on a path of \u2018Ghana beyond Aid,\u2019\u201d Mr Ofori-Atta stated.
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