In a historic financial transaction by the Ministry of Finance, an amount of $2.25 billion has been raked in through the issuance of bonds.
The ministry yesterday successfully issued 15 and 7 coupon of 19.75%, raising a total amount of $1.13 billion.
In addition, the finance ministry raised the cedi equivalent of $1.12 billion in 5 and 10-year bonds via a tap-in arrangement. "These $2.25 billion and resulted in the lengthening of the maturity profile of the instruments available on the domestic market. This issuance represents the largest amount issued by a sub-Saharan African country in a day," a statement from the ministry indicated.
Interestingly, the money raised would not necessarily add to Ghana's ballooning debt profile but rather be used to offset part of the existing debt and also for infrastructure development.
According to the statement, the pricing obtained was also consistent with the initial price range of 18.95% - 19.85%.
"The issuance attracted a number of global portfolio investors, including a very substantial investment in the 15-year bond by a very well respected global financial investor," it stated.
The bond sale according to report, was managed by three financial institutions - Barclays, Stanbic Bank and Strategic African Securities SAS.
The Minister of Finance, Ken Ofori-Atta, stated that the issuance proceeds will be used to repurchase and/or retire a portion of the higher coupon short-term public debt instruments, meaning there will not be an overall increase in the total debt stock.
"This is in line with our liability management strategy which seeks to re-profile our public debt stock, extend tenors, reduce short term rollover pressures, and lower domestic interest cost. Additional, this issuance will further help improve our foreign exchange reserves by over $2 billion and further support the cedi.
"This successful bond issuance and the significant amount raised, especially the longer tenor 15-year, is an indication of the strong appetite for Ghana Bonds due to the markets' renewed confidence in the long term prospects of the Ghanaian economy and a major vote of confidence in the new government's economic policies, fiscal measures and programmes as outlined in the 2017 Budget," the statement explained.
The ministry was also happy that on Friday parliament passed the Appropriation Bill for the 2017 budget, including the landmark realignment of statutory funds which free up about GH4.5 billion in fiscal space for 2017.
"The ministry of finance is pleased by the success of this bond offer," according to the finance minister.
"..This is an indication of the markets' belief in our commitment to building an effective public financial management system, improve the country's debt sustainability outlook and mitigate the crowding out of the private sector. it is imperative that we re-profile our total debt stock of USD30 billion which should help put us on a path of 'Ghana beyond Aid," Mr. Ofori-Atta stated.
Source: Daily Guide
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Is this not the same thing Seth Terkper was doing? Issuing bonds from both local and foreign market and using proceeds to offset some of the existing debt? The Lord have mercy on Ghana.
Why should we accept someone's papers he has printed as loans that Africans need to pay back with interest? What is the back bone of the dollar? Is it solid gold or just the US army? The dollars have no solid backing. They just print it and give it as loans to us
Now that you have bought the country and government some time and created for us some wiggle room, let's get to work. God bless our homeland Ghana, and make our nation great and strong.
I am kind of confused here. Bond is not free money, we will pay for it in future.
In less than 4 months, you have borrowed more than $2 billion! Eiiiiiii NPP!
Can't the Blackman survive without the dollar? We have quarry, cement or clinker, sand, water for construction, wood or wawa, Masons, carpenters, architects, civil engineers, why should dollars play a role in infrastructural development? We must fight for mental freedom! Dollars are just papers!!!
Am at a loss. A bond is not a gift. It is debt with an interest rate to be paid over a period of time like the EUROBOND or any debt instrument.
Please this is a free public advisory notice. No one should buy TCL Air-Conditioners. The product is very defective, the AC Boards are faulty and they almost resulted in my house catching fire. The 5 year warranty is a gimmick because when you raise defective concerns, Leslie and Joyce (employees) and Kumi and Philip (sub-contracted air-condition installers) give you the run around instead of replacing. I bought 2 No. 2.5 TCL Air Conditioner, dating October 2016 and either is yet to work after the 8th time switching on. BUYER BEWARE, don't be tricked by their constant adverts on MAX TV like I did
So what are these NDC mediocre financial thinkers including Ato Forson ; Seth Terpkor and Fifi Kwettey the Chief NDC economist make of this creative financial initiative by Ken Ofori Atta because this is not the BOGUS 'smart borrowing'labelled by Ato Forson and Seth Terpkor who go out on the international markets to accumulate debt for Ghana and solicit for funds to build shoddy projects and then divert the rest of the funds into their pockets these evil NDC kriminals and kleptomaniacs who do not use their brains to achieve anything in life but steal ; today we have people who have the experience ;have achieved something in life and can deliver creative wealth to help Ghana not these NDC educated iliterates who do not even understand the loans agreements they go and sign for Ghana love flying on planes and taking per diems on every trip and boast of acquiring expensive loan agreements ; this initiative is what we call 'HOME GROWN CREATIVE THINKING' to assist the economy .
This one is not borrowing.God dey