Government targets GH¢22.35 billion of domestic debt securities in Q1

Government will borrow a total of GH¢22.35bn from the domestic debt market in the first quarter of 2021, according to the public debt issuance calendar issued by the Finance Ministry on Friday.

About GH¢19.73bn of the amount is earmarked to roll over maturities, whereas the remaining GH¢2.61bn is fresh issuance to meet government’s financing requirements.

Domestic portfolio investors will be able to invest up to GH¢13.51bn in short-term government debt securities, which are not open to foreign investors. This comprises debt securities with tenors of 91 days, 182 days and 364 days to be issued during the period, all of which are reserved for domestic investors.

The remaining securities of GH¢8.84bn, comprising debt securities with tenors from two years up to 20 years, will be made available to non-resident investors as well, who have tended to dominate subscriptions of such medium- to long-term issuances.

Government is expected to update the issuance calendar on a monthly rolling basis, to reflect a full quarter financing programme. This is due to prevailing extraordinary circumstances brought about by the coronavirus outbreak.

Total amounts of GH¢10.4bn, GH¢1.7bn and GH¢1.41bn will be issued via auction for the 91-day, 182-day, and 364-day bills, respectively.

For securities with higher tenors, government will issue them through the book-building method.

Amounts of GH¢4.13bn and GH¢1.7bn will be issued for the 2-year notes and 3-year bonds, along with a targeted amount of GH¢1.4bn in 5-year bonds. Totals of GH¢800m and GH¢ 700m are targeted for the 6-year and 7-year bonds respectively.

For the 20-year bond, GH¢111.4m is expected to be issued as a shelf offering, which will be re-opened based on investors’ request and dependent on market conditions.