Business News Mon, 22 Aug 2016

Economic rebound will attract ‘good’ interest for Eurobond – Terkper

The Finance Minister, Seth Terkper says he is hopeful Ghana will attract the best interest rate for the country’s 2016 Eurobond.

According to him, recent developments in inflation and the coming on board of the Tweneboah Enyenera Ntomme (TEN) oil fields will prompt investors to offer interest rates corresponding to the market conditions.

Seth Terkper’s comments come barely a week after he reiterated the ministry’s position that it has not abandoned its decision on the 2016 Eurobond.

“We have been borne out unless for some major events, at the time we started the road show, our 2023 bond which we issued at 2013, was priced at 10.5 interest rate but today it is at 9.4 percent.

“This means that the news about the first quarter inflation performance of this year, the growth figures and the fact that TEN is no longer a prospect story, are all beginning to show that there is something for real and we hope that these would help the process and at the appropriate time, we can go in with the investors and price,” he told journalists in Accra.

Government, early this month, suspended its planned 2016 Eurobond issue to raise 750 million dollars.

Proceeds of the bond were to be used to retire the country’s first Eurobond which matures next year.

A statement issued by the Finance Ministry on the move at the time attributed the decision to the unfavourable interest rates being offered by investors. Though it is unclear how much the investors were offering for Ghana’s bonds, Seth Terkper explained that government made the right decision in suspending the issue.

While admitting that the plan was a slight shift from previous practices, Mr. Terkper justified the move and was confident of a positive outcome this time round.

“Last year, we did not price immediately after the road show even though we did so in our first three bonds. But it does not necessarily follow that you must not exercise the option not to price immediately,”

“We decided to go this way because we were informing the markets on various things from the IMF program to the TEN fields. We felt that following these narratives and what we have done with our sinking funds proceeds,” he added.

The Finance Minister concluded that the recent developments imply fewer risks to the Ghanaian economy which will restore confidence among investors.

“The markets were not taking it or had not evaluated it because some of the information were being put out there for the very first time so we decided to allow investors to analyze the facts,” he stated.

Source: citifmonline.com
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