The Government of Ghana has announced the issuance of a 7-year Ghana cedi denominated Treasury bond (Rollover) with a settlement/ Issue date effective Monday, November 16, 2020, using the “Book-build format”.
This is according to a statement released by the Bank of Ghana that indicates the 7-Year Treasury bond is ‘senior unsecured’ in terms of its security status, and it’s supposed to mature by the year 2027 with a ‘bullet’ principal repayment method.
The Bank of Ghana posits that “each Bond shall have a face value of One Ghana Cedi with a minimum bid of GHS50 Thousand and multiples of GHS1 Thousand, thereafter.” The listing will be done on the Ghana Stock Exchange (GSE).
The bond issuance is in accordance with the Governing Law of Ghana and follows the release of initial pricing guidance through the Ghana Stock Exchange (GSE), the Bank of Ghana opined.
In terms of distribution, the general public is hereby notified that the bond is to be “marketed to Resident Investors or Open to Non-Resident Investors,” the Bank of Ghana added.
This 7-year Ghana cedi denominated Treasury bond is issued together with a 3-year United States Dollar denominated Treasury bond ready for Settlement / Issue today, Friday, 13thNovember 2020.
The 3-year USD Treasury bond will be issued in 2 Series namely Foreign Exchange Account (“FEA”) Series and Foreign Currency Account (“FCA”) Series, the Bank of Ghana alerted.
“The FEA Series and the FCA Series will be identical to each other except that only funds domiciled in an FEA can be used to purchase FEA Series Bonds and only funds domiciled in an FCA can be used to purchase FCA Series Bonds”
Giving a breakdown of procedures undertaken including the pricing, bookbuild, and allocation methodology regarding the offer period, the statement issued by the Bank of Ghana indicated that last Tuesday, November 10, 2020, the Initial Pricing Guidance was released. The opening of the book-build followed suit on Wednesday, 11th of November at 9:00 AM. A “Revised Pricing Guidance” is released as “necessary during the Book-build”.
Yesterday, November, 12 marked the Final Pricing and Allocation. This included the release of a “Revised and Final Pricing Guidance” deemed necessary during the Book-build. Also, the books were closed around 3:00 PM, the Bank of Ghana remarked.
The Bank of Ghana cautioned that the issuance methodology adopted requires that “all successful bids will clear at a single clearing level. Discretionary allocation at the single clearing level in event of over-subscription”.
The issue methodology further requires that aside from the application of the book-building format, bids are accepted on a yield (percentage) basis, the Bank of Ghana asserted.
It should be noted that the November 2020 7-year Ghana cedi denominated Treasury bond Issuance will be done through Absa, Databank, Fidelity, IC Securities, and Stanbic who will serve as “active joint book-runners for the bond,” the Bank of Ghana added.
