The Bank of Ghana has announced the issuance of a 2-year Treasury denominated bond by the government on 5th October, 2020 which will mature in 2022.
According to Bank of Ghana, each bond issued will have a face value of GHc1 with a minimum subscription of GH¢50,000 and multiples of GH¢1,000 thereafter. The offer will be opened to resident investors and non-resident investors.
As stated in the notice, the procedure for the issuance of the Treasury bond will begin today (October 1) with the opening of the book-build and following the release of an initial pricing guidance through the Ghana Stock Exchange.
All Successful bids will be cleared at a single clearing level but there will be a discretionary allocation in an event of over subscription at a single clearing level.
The Treasury bond will be issued through Absa, Databank, Fidelity, IC Securities and Stanbic bank who will serve as active book runners for the bond.
Issuance and settlement of the bond, Treasury bond, will take effect on Monday, October 5, 2020.
According to Ministry of Finance, the issuance of the 41-year bond has made Ghana the first West African country in the African continent to successfully raise US$ 3billion in the internal debt capital markets.
The capital market has confirmed the increasing confidence in the economy of Ghana when the
West African country’s 2020 international bond issuance resulted in an order book five times the amount required on Tuesday, 4 February 2020.
“The transaction comprised US$1.25 billion 6-year Weighted Average Life (WAL), US$1 billion 14-year WAL and US$750 million 41-year WAL priced at a coupon rate of 6.375%, 7.875% and 8.750% respectively.
“Despite 2020 being an election year, the sterling investor confidence in the country has been demonstrated by the competitive rate of 8.75% at which the 41-year WAL tranche, the longest-ever tenor bond issued by an African issuer, was issued compared to a rate of 8.95% 31-year bond issued in 2019”.
“The use of proceeds for the bonds is to support Ghana’s budget for infrastructure, restructuring of the energy and financial services sectors, and a liability management exercise”.
