The Government of Ghana has announced the issuance of a 2-year Ghana Cedi denominated Treasury bond (rollover) with a settlement/ Issue date effective Monday, December 7, 2020, using the “Book-build format”.
This is according to a statement released by the Bank of Ghana and follows after the settlement of the 3-Year Treasury bond yesterday, which hit GHS 650.16 million with a bid rate equivalent to its interest rate and ranging from 19 percent and extending to 19.25 percent per annum.
The Bank of Ghana indicates that the 2-Year Treasury bond is ‘senior unsecured’ in terms of its security status, and it’s supposed to mature by the year 2022 with a ‘bullet’ principal repayment method.
“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 Bank of Ghana mentioned, addingthat the listing will be done on the Ghana Stock Exchange (GSE) following the release of an initial pricing guidance.
The Bank of Ghana also opined that the bond issuance is in accordance with the Governing Law of Ghana and it’s to be “marketed to Resident Investors or Open to Non-Resident Investors” through the Ghana Stock Exchange (GSE).
Today, December 1, 2020 marks the release of the Initial Pricing Guidance and the start of procedures regarding the offer period including the pricing, book-build, and allocation methodology.
At 9:00 AM, tomorrow, 2nd December, the Bank of Ghana says a“Revised Pricing Guidance” is to be released as “necessary during the Book-build”. Subsequently, the Final Pricing and Allocation of the Treasury bond will follow suit on 3rdDecember and involves the release of a “Revised and Final Pricing Guidance” deemed necessary during the Book-build.
The Bank of Ghana has cautioned that the “books are expected to close around 3:00 PM on Thursday Final Pricing and Allocation,” and 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.
The Bank of Ghana finally informs the general investing publicthat the December 2020 2-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”.

T-Bills Undersubscribed Again
Treasury bill bids for the 2nd week running have been undersubscribed at the latest Government of Ghana (GOG) Securities Auction, causing the government to fall short of its target amount by approximately percent 7 percent.
According to the results presented by the Bank of Ghana, the total amount of the 91/182/364 Day Bill summed up to approximately GH¢915.31 million falling below the stipulated target amount of GH¢984 million, leaving the government with no option but to accept all bids tendered by banks.
This implies that the 91/182/364 T-Bill securities lost sales of GH¢ 68.69 million. Although the government did not meet its target, this is better than last time’s sales where government fell short of its target by 21.5 percent losing an amount GH¢211.29 million.
Detailing the Treasury bill sales made, the Bank of Ghana intimated that the 91-Day Bill dominated the sales amounting to GH¢622.89 million, bringing in approximately 68 percent. Next is the 364- Day Bill with 21 percent amounting to GH¢196.20 million and the remaining 11 percent, constitutes the 182 Day Bill making a minimal amount of GH¢96.22 million.
The Bank of Ghana further asserted that the range of rates have remained fairly stable for the month of November. The range of bid rates and the discount rates lingers around the same averagebut are lower than the interest rates. The bid rates for the 91-Day Bill reached between 13.5 and 13.65 percent per annum, and then from 13.97 to 14.13 percent per annum for interest rates. The 182 Day Bill also shows a similar but a marginally smaller range of bid rates and a higher interest rate than the 91 Day-Bill. It had an interest rate extending from approximately 14.08 and 14.19 percent per annum, while its range of rates for bids lay between about 13.2 and 13.25 percent per annum. The 364 Day-Bill had the highest rate with bid rate of 14.35 to 14.6 percent and interest rates of 16.75 to 17.1 percent.
Highlighting on the upcoming auction of Government of Ghana securities to be held, the report indicates a total target amount of GH¢1,012 million for 91/182 Treasury bills. Also, the report predicted a weighted average discount rate and interest rate per annum of 13.59 percent and 14.08 percent respectively for the 91 Day bill, 13.2 percent and 14.14 percent for 182 Day bills correspondingly, for the period starting from today, 30thNovember – 5th December 2020.
The Bank of Ghana has alerted that “The GOG Securities Wholesale Auction is opened to only Primary Dealers” who are obliged to act as “market makers in GOG Securities”.
Finally, the Bank of Ghana cautions that “The investing Public interested in purchasing or selling GOG Securities may do so on the Secondary Market (Ghana Fixed Income Market) through Depository Participants (including Primary Dealers)”.