GAT confident of successful bond listing

Management of the Ghana Amalgamated Trust (GAT), says it is confident of a successful bond issue which should afford it the resources to run its programmes without any hitches.

Managing Director of the Trust, Mr Eric Otoo, told this paper “we are confident that GAT will close the bond listing successfully and generate the total target for its programmes.”

GAT is engaging pension funds and other potential investors including high net worth individuals and foreign investors. Mr Otoo maintained that nobody was being forced to invest, adding “every fund manager had the opportunity to assess the viability of the bond and they are doing it at their own will.”

GAT already has some commitment of funds from some investors and continues to engage others for additional commitments towards it total bond listing goal.

GAT is set to start recapitalizing the five local banks from March 2019 after it raises all the GH¢2 billion from investors for its five-year corporate bond.

According to an agreement reached with the Bank of Ghana, the five local banks should fully meet the minimum capital requirement by March 31 2019.

Mr Otoo said they had already had some pre-engagement with investors to ensure the fundraising exercise becomes successful. On the Pension Fund managers,

Mr Otoo added that GAT would be paying an interest of 21 per cent per annum because it’s a “zero-rated bond” but rather the principal plus the interest would be paid at the end of five years. The bond would be raised in two tranches; the first would be GH¢750 million and another GH¢1.5 billion.

The GH¢750 million would be shared among ADB, UMB, Prudential and Sahel and Omni Bank; however, NIB is expected to receive GH¢1.5 billion.

The bond would be listed on the Fixed Income market on the Ghana Stock Exchange after the fundraising before the end of this month.

The Trust is working to take a controlling stake in some of these local banks. This is part of measures to ensure that the necessary measures are instituted to closely monitor their investments.

The plan could result in the taking of some positions on the board of these banks and possible management roles.

Government is expected to offer 70 per cent guarantee to the 5-year bond. This would ensure that in case GAT has any challenge in securing the required returns for investors, the government would step in to pay the investors.

However, the Managing Director of GAT maintains this should just be seen as a guarantee and that they promise to work hard to deliver prudent returns to investors.