Letshego Ghana Savings and Loans Plc has successfully listed its GHS100 million Senior Unsecured Dual Bond Offer on the Ghana Fixed Income Market (GFIM).
The latest issuance marks a noteworthy achievement for the company, as it is the second issuance this year under its expanded GHS500 million Medium-Term Note Programme. The dual bond offer has garnered substantial interest from investors, underscoring the market’s confidence in Letshego Ghana’s financial performance and its commitment to driving financial inclusion in the country.
The latest bond issuance saw robust investor demand, reflected by an oversubscription rate of 1.31 times. Letshego Ghana received total bids amounting to GHS131 million, surpassing the targeted GHS100 million issuance size. This strong investor interest is a testament to the company’s solid reputation and the strategic appeal of its offerings in the local debt capital market.
The oversubscription highlights the growing confidence in Letshego Ghana’s ability to provide stable returns while delivering on its brand purpose of enhancing access to inclusive financial solutions across the country.
The dual bond offer was structured to cater to diverse investor preferences, featuring both a 3-year fixed-rate note and a 4-year floating-rate note. The 3-year fixed-rate note was priced at a competitive 22.50%, providing attractive returns to investors seeking stability.
Meanwhile, the 4-year floating-rate note was pegged at the 182-day Treasury bill rate plus a margin of 100 basis points. This approach offered a mix of fixed and floating rates, catering to both risk-averse investors and those looking for higher returns tied to the prevailing interest rate environment.
Strategic Objectives and Diversified Funding
The successful listing of the GHS100 million bond issuance forms part of Letshego Ghana’s broader strategy to diversify its funding base and tap into alternative investment opportunities. This initiative comes at a time when the Ghanaian financial market is witnessing increased activity in the corporate bond space, with investors showing a keen interest in well-structured, medium-term note programmes that offer reliable returns.
By raising a total of GHS200 million in 2024 alone, Letshego Ghana is demonstrating its proactive approach to capital management. Earlier in March, the company secured GHS100 million in its first issuance of the year, which, combined with the latest issuance, brings the total amount raised under its Medium-Term Note Programme to GHS200 million. This funding boost will support Letshego Ghana’s strategic objectives, including expanding its product offerings and enhancing its outreach to underserved communities.
Nii Amankra Tetteh, the Country Chief Executive Officer of Letshego Ghana, meanwhile, expressed gratitude towards the investors.
“We would like to express our gratitude to our investors for the continuous confidence and trust posed in the Letshego team. With this funds injection, we can continue to work on our strategy of providing increased access to inclusive financial solutions across the country. We appreciate the ongoing support of our investors, who remain valuable partners as we fulfill our brand purpose to improve more lives in Ghana.”
Nii Amankra Tetteh
Lead Arrangers
The bond issuance was jointly arranged by Stanbic Bank Ghana Ltd and Black Star Brokerage Limited, serving as the co-sponsoring brokers for the transaction. Their expertise and active role in the capital markets were instrumental in the successful structuring and pricing of the bond offer. The partnership between Letshego Ghana and these financial institutions showcases the collaborative efforts within the industry to enhance access to capital for corporate entities while providing viable investment options to institutional and retail investors.
The issuance of the GHS100 million bond is a clear indication of the depth and resilience of Ghana’s capital market. It also signifies Letshego Ghana’s position as a trusted issuer in the corporate debt space.
By tapping into the local debt market, Letshego Ghana is not only diversifying its funding sources but also contributing to the development of a vibrant capital market ecosystem in Ghana. The positive reception of the bond offer reflects investor appetite for corporate debt securities and highlights the confidence in the company’s creditworthiness and strategic direction.
The funds raised through this bond issuance will be channeled towards enhancing Letshego Ghana’s capacity to provide financial solutions tailored to the needs of individuals and businesses, especially in underserved segments of the economy.
As part of its mission to promote financial inclusion, Letshego Ghana has been actively expanding its product portfolio to cater to the evolving needs of its customers. The additional capital will support the company’s efforts to scale its operations, introduce innovative financial products, and strengthen its presence in key markets across the country.
Letshego Ghana’s successful bond listing comes at a time when the financial landscape is evolving, with increased demand for tailored investment products that align with investor risk appetites and market conditions. The pricing of the 3-year fixed-rate note at 22.50% offers a competitive return, making it an attractive option for investors seeking stability amidst fluctuating interest rates. The floating-rate note, on the other hand, provides a hedge against interest rate volatility, offering a margin above the Treasury bill rate.
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