Business News Fri, 11 May 2018

Eurobond: Ghana raises $2bn at lowest interest rates

Government secured more than it targeted for its Eurobond which was closed on Thursday, May 10, 2018, in London.

The government was seeking to raise 750 million dollars.

However upon completion, the Sovereign bond accrued 2 billion dollars from investors.

The bond was in two categories; 10 and 30-year bonds respectively.

The 10-year bond raised 1 billion dollars at an interest of 7.62 percent.

Also, the 30-year bond raised 1 billion dollars at an interest rate of 8.62 percent.

A statement from the Ministry of Finance said the development represents the first time a sub – Saharan country with a rating of B stable has priced a sovereign Bond at such low costs indicating a strong investor confidence.

“It is also the first time Ghana has extended its international capital market funding to 30 years,” the statement further said.

The team on the roadshow attributed the response to an improvement in the economic conditions.

“This is a reflection of the improving Ghanaian situation for which reason we are benefiting from lower rates despite recent turbulent activities on the emerging Markets front. These cheaper bonds will help us to pay off the expensive ones issued by the previous administration and save mother Ghana money which can be invested in job dense initiatives. Investors have expressed increased confidence in the early turn around signs and have chosen to reward Ghana for it.”

The last 5-year Eurobond issued in 2016, attracted an interest rate of 9.25 percent.

Source: citibusinessnews.com
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