GH¢17.4 billion bonds to be issued in 1st quarter

• Posted on January 18, 2017
• by Nana Kwesi Coomson
• Comment

GOVERNMENT plans to issue GH¢17.4 billion, the equivalent of $4.1 billion worth of domestic instruments for government finances and debt restructuring in the first three months of this year

An amount of GH¢15.5billion (GH¢15,504.43million) would be used to rollover forecast maturities with the remaining amount of GH¢1.8billion (GH¢1,895.57 million) being fresh issuance to meet government’s financing requirements and build buffers for liability management.

The break down and issue dates are as follows: January17- GH¢6.7billion, February 17 – GH¢5.3 billion and March 17 – GH¢5.4billion.

The papers will include a fresh five-year cedi bond this month worth 600 million cedis to support the budget, and a three-year 700 million cedi bond to be issued in February, the bank said in a statement.

The two bonds will be issued through book-building transactions, and settlement will be on the last Monday of each month. In all, about 15.5 billion cedis will be used to roll over expected maturities.

A statement issued by the Bank of Ghana (BoG) and signed by its secretary Mrs Caroline Otoo said should the auctions in the medium-term instruments be successful and acceptable at prevailing interest rates, government may consider accepting a reasonable amount above the target to build buffers which would be used to reduce borrowing at the short end of the yield curve.

It said the 91-day and 182-day will be issued weekly while the 1-Year Note would be issued bi-weekly through the primary auction, with settlement occurring on first and third Mondays of each month.

It added that the 2-Year Note would be issued monthly through the primary

auction with settlement occurring on second Mondays of each month while the 3 and 5-Year bonds will be done per the calendar through the book-building method at the Ghana Stock Exchange (GSE) and settlement will be on the last Monday of each month. 

The statement explained that the medium-term instruments may be reopened to create liquidity and benchmark securities adding “these instruments may be reopened to create liquidity in the instrument.

By Elvis DARKO, Accra