SEC lauds IFC US$1bn domestic bond

Director-General of the Securities and Exchange Commission (SEC) Mr. Adu Anane Antwi says the International Finance Corporation’s (IFC) planned move to raise US$1bn from the domestic market will add to the local bourse’s growing credibility.

“Once IFC starts issuing its bonds, then all the other institutions that issue bonds will begin to look at Ghana as a possible market -- and that is good for us,” Mr. Anane Antwi said.

The IFC last week was given approval by the Ghana Stock Exchange (GSE) and the Securities and Exchange Commission (SEC) to issue regular cedi-denominated bonds worth up to US$1billion in Ghana’s market.

“The consent from the Ghanaian authorities enables us to support deepening of the local capital markets and offer local-currency funding for priority sectors such as infrastructure,” IFC’s Vice President and Treasurer Jingdong Hua said in a statement.

The bonds will be sold to domestic and foreign institutional investors, and proceeds will be used to fund private sector projects in areas such as infrastructure and to increase access to finance for small- and medium-sized enterprises.

Although details of the issues are yet to be announced, the statement said proceeds of the bonds will be used to fund developmental projects in the country.

Such bonds, the first of their kind by an international institution on the Accra bourse, will add to the government’s three- and seven-year corporate bonds which are being traded on the market.

The bonds are to be issued under the IFC's Pan-African Domestic Medium-Term Note Programme that was launched last year, a statement from the IFC said.

The International Finance Corporation (IFC) last week successfully raised US$3.5billion from a five-year global bond to be used in lending support to private sector development.

The five-year bond, according to the private arm of the World Bank Group, is its largest bond issue to date.

“IFC’s funding operations are at the core of our business. They enable us to meet the financing needs of private sector companies in emerging markets, and provide IFC with sufficient liquidity to fulfil our counter-cyclical role in a fragile global economy,” said Jingdong Hua.

The bond issue generated an order book close to US$5billion and set the pricing benchmark for IFC’s 2014 fiscal year borrowing programme.

The IFC says it plans to raise US$16billion across a range of markets and currencies during its current fiscal year ending June 30, 2014.

It also plans to issue debt in Botswana, Kenya, Namibia, Rwanda, South Africa, Uganda and Zambia under the programme.

IFC is a development finance institution (DFI) that often uses foreign-sourced funds to lend to the government, as well as invest in the private sector.