Gov’t accepts all bids of 2yr-bond worth GH¢668.76 to settle maturing debt

The government of Ghana accepted all bids to the tune of GH¢668.76 million through the issuance of the 2-year bond yesterday.

The yield on the debt instrument which is expected to mature in 2022 was 18.75%

Due to challenges in the global economy where lots of investments have been lost by investors due to the coronavirus pandemic, analysts have welcomed the coupon rate which they say is within the acceptable limit.

Class Business understands that almost all the monies will be used to settle maturing debt (principal and interest), leaving very little or none for capital investments.

The debt instrument was opened to both resident and non-resident investors.

Each Bond had a face value of one Ghana cedi with a minimum bid of GH¢50,000 and multiples of GH¢1,000 thereafter.

Absa, Databank, Fidelity, IC Securities, Stanbic were joint book runners.

The government of Ghana will this year spent GH¢22 billion on interest payments on loans.

The country is however targeting GH¢67.7 billion as total revenue and grants for this year. Out of this, chunk of this ill go into wages and emoluments, as well as cost of servicing debt.

Interest payments on Ghana’s debt increased by 8.97% to 40.71% at the end of the third quarter of 2019