The government through the Bank of Ghana on January 23 re-opened the 2-year Treasury Bond issued last year to raise additional GHC485.91 million which it described as current amount outstanding.
The bond was originally opened on February 19, 2018 and was expected to mature on February 17, 2020.
Business Finder gathers that the government issued the debt instrument to bridge some financing gap within the 2019 budget.
In this regard, majority of the proceeds of the bond which was opened to both resident and non-resident investors will be used to finance infrastructure or capital expenditure.
Each bond was expected to have a face value of GHC1 while the minimum bid was GHC50,000 and in GHC1,000 thereafter.
The coupon rate for the bond was 16.50 percent, meaning investors will receive 16.50 per cent interest on their principal which is expected to be paid semiannually until maturity.
Fidelity Bank was the lead manager for the bond which will be listed on the Ghana Stock Exchange.
Last week Friday, government raised a total of GHC773.32 million in short term securities mainly 91-day and 182-day Treasury bills. This was short of the targeted of GHC823 million.
Government is expected to increase borrowing in 2019 to fund a higher fiscal deficit target of 4.2 percent, up from 3.7 percent in 2018.
This is expected to enable the government to increase spending in 2019 to ramp up infrastructure development and increase funding to flagship programs that formed the bedrock of its campaign promises.