Government’s 2-yr note rollover opens today

Government will from today begin the process to roll over maturing two-year cedi-denominated treasury notes with the opening of the order book to resident and non-resident investors, according to a notice published by the Bank of Ghana.

This follows the release of the initial pricing guidance on Tuesday for the issuance of the notes, which will mature in 2022.

Per the government’s debt issuance calendar for the last quarter, an amount of GH¢1.5bn is expected to be raised from two-year debt in November, with a further GH¢1.2bn expected to be raised in December.

In total, the government is aiming to raise GH¢22.2bn from domestic debt issuance in the last quarter, of which GH¢19.7bn will be applied to roll over maturing issues.

The order book for the two-year notes is expected to be closed on Thursday, with the final pricing and allocation determined.

The notes will be issued through Absa, Databank, Stanbic, Fidelity Bank and IC Securities acting as book runners for government.

Government debt strategy

According to the government, its 2020 debt strategy focuses on an appropriate financing mix to mitigate costs and risks, and to achieve the desired composition of the public debt portfolio with respect to borrowing from external and domestic sources.

The financing strategy proposes issuances of government securities on the domestic market to create cash buffers on top of the programmed net domestic financing of the budget deficit.

The strategy states that government will issue or re-open medium- to long-term instruments (2-year, 3-year, 5-year, 7-year, 10-year, 15-year, and 20-year bonds) and refinance some of the maturing Treasury bills and bonds.

The strategy also plans to issue marketable and non-marketable debt against possible contingent liabilities arising from the financial and energy sectors in 2020.