Business News of Mon, 6 Nov 20172
Goverment to issue second domestic dollar bond next week
Government is planning to issue a three-year domestic dollar bond on Tuesday [November 7, 2017] to develop local funding sources to support the economy. According to lead managers of the bond, it is open only to Ghanaians.
This is the second after a debut issue in October 2016 where the government then issued a two-year domestic dollar bond.
It raised $94.64 million with an interest rate of 6 percent. The issue size has not been announced but sources said the government is targeting a range of $50 million-$100 million. Bids will open on Tuesday until final pricing on Thursday.
The bond, which will mature in 2020, will be issued through book-building to be arranged by Barclays Bank, Stanbic Bank and brokerage firm Strategic African Securities. Settlement is slated for Nov. 13.
“It’s not really about the size. Rather, the motivation is to continue to develop a local funding market, and the target is those investors and businesses that directly generate dollar revenues,” a co-arranger said.
Ghana is emerging from a fiscal crisis that has left it with a large budget deficit and public debt, forcing the government into an aid deal with the International Monetary Fund that has now been extended by a year to April 2019.