The Ministry of Finance has released an issuance calendar indicating that the government will borrow GH¢22.35 billion in the first three months of the year ending March 2021 as it boosts the sale of securities to meet its financing requirements.
This calendar, according to the Finance Ministry is part of government’s effort to improve market transparency in the issuance of its securities. Also, it is developed based on the Net Domestic Financing provided in the 2021 Expenditure in Advance Appropriation and the domestic maturities.
“In addition, the Calendar takes into consideration Government’s liability management programme, market developments (both domestic and international) and the Treasury & Debt Management objective of lengthening the maturity profile of the public debt”.
Giving a breakdown of the gross amount to borrow in the first quarter of 2021, the government disclosed that out of the GH¢22.35 billion, it plans to issue GH¢19.74 billion in respect of rollover maturities and the remaining GH¢2.61 billion is a fresh issuance to meet government’s financing requirements.
The government further asserted that it aims to issue both treasury bills and bonds including the 91-day Treasury bills, 182-day Treasury bills, 364-day Treasury bills, 3-year bond, 5-year bond, 6-year bond, 7-year bond and 20-year bond.
Detailing the amount to float for each of the financial instruments mentioned above, the government intimated that it plans to issue GH¢10.4 billion worth in 91-day T-Bills which happens to be the highest treasury issue.
Following after is the 2-year bond where the government expects to raise GH¢4.13 billion. Next is an expected issuance of GH¢1.7 billion each for the 182-day T-Bills and 3-year bond.
The 364-day T-Bills, 5-year bond, 6-year bond, and 7-year bond follows suit in that order with an intended issuance of GH¢1.405 billion, GH¢1.4 billion, GH¢800 million, and GH¢700 million respectively.
For the 20-year bond which is the least compared to the other issuances, the government estimates GH¢111.4 million.
Touching on how the issuance is going to be done periodically, the Finance Ministry opined that whereas the three-months and six-months T-bills will be issued weekly, the 364-day T-bill will be issued bi-weekly.
The treasury bill issuance will be done through “the primary auction with settlement being the transaction date plus one working day,” the Ministry added.
For Securities of 2-year up to 7-year, government will issue them through the book-building method to determine the price at which the bond will be offered to investors.
The issuance of the 20-year bond as shelf offering will be re-opened based on investors request and on market conditions.
The Ministry of finance further cautioned the general public that the calendar issuance is based on the foregoing and current market conditions, and as such the summary of the gross amount borrowing requirement for the period January to March, 2021 are indicative to guide the market and may be revised.
The government is expected to update the issuance calendar on a monthly rolling basis to reflect a full quarter financing programme, the Ministry revealed.
The Ministry of Finance finally assured all stakeholders and the general public that “we continue to strive for greater predictability and transparency in the domestic bond market,” adding that “It is our expectation that this 2021 January to March Calendar meets the requirements of market participants”.
