Business News Thu, 13 Oct 2016

Government to achieve local dollar bond target

The transaction is going on very well and the target of between 25 and 50 million dollars will be achieved.

This is the assurance from the joint book runners of government’s first local dollar bond.

The bond, which was issued last week Monday, is expected to close today.

A statement on the issue from the central bank indicated that the move is to explore alternative sources of funding for meeting the financing needs of government and further develop and deepen the capital market in Ghana, through the introduction of a new investment product.

Though it is not clear how much subscription has been recorded for the transaction, Citi Business News is learning that response has been encouraging.

A representative of the Joint Book Runners, Kobla Nyaletey earlier said that government will achieve the target due to the current condition of the exchange rate market.


“This is the first [local dollar bond] transaction and indeed we’ve met investors in a couple of meetings and we are very confident that we will be able to issue and get the target amount that the government is looking for in the indicated price range of 5.5 to 6.5 percent, ” he said.

He explained that the bond will be restricted to residents and Ghanaians only.

“This is a domestic Ghanaian market transaction open only to residents and Ghanaians, so non residents are not permitted to participate in this transaction,” he noted.

The 1 billion cedi local bond forms part of the 25.3 billion cedis government announced it intends to borrow between August and December this year.

Of the amount, 23.8 billion cedis is expected to be used to rollover forecast maturities with the remaining amount of 1.4 billion cedis being fresh issuance to meet government’s financing requirements.

A statement on the revised issuing calendar also explained that government aims at continuing the objective of lengthening its debt maturity profile by reducing short-term borrowing.

Source: citifmonline.com