Ghana lists 10 year Eurobond
This is the first time an African country is co-listing a Eurobond on the local exchange. The bond was first listed on the Irish Stock Exchange in Dublin.
Ghanaian institutional investors and local investors hold $16.5 million of the 2023 Eurobond.
The recent bond issue offered local investors the opportunity for the purchase of the facility.
We use this opportunity to encourage the private sector firms to follow the government’s lead
The country’s Finance Minister, Seth Terkper at the listing, underscored the need to develop Ghana’s bond market to bridge the prevailing long term financing gaps.
“The wide infrastructural gap, which constrains our development efforts as a country, can only be closed when we tap into long-term financing options, such as the capital markets, both domestic and foreign,” he said.
As Ghana consolidates its middle income status, Terkper said, it would be prudent to finance the capital component of the budget with long-term bonds.
In Ghana, the required infrastructural financing gap is about $1.2 billion a year.
The government, Terkper noted, had taken substantial measures to deepen the development of the corporate bond market.
Such measures include the regular publication of an issuance calendar and extension of the yield curve.
“We use this opportunity to encourage the private sector firms to follow the government’s lead to diversify their sources of capital by tapping into the local market,” he said.
Many have described the listing of the bond as a landmark and expressed hope it will mark the beginning of deepening of the bond market.
Ecobank Development Corporation country representative, Michael Cobblah said the historic listing should open the avenue for the development and issue of corporate bonds on the market.
He urged government to encourage municipal assemblies to issue bonds for development. Look for new information at this website
Ghana had raised $1 billion from the international capital markets.
It attracted $750 million for cash with maturity period of 10 years with a coupon rate of 7.875 per cent, which would be paid semi-annually.
Proceeds from the bond will be used to finance counterpart funds for capital projects as well as to finance capital expenditures approved in the 2013 budget.
Priority will be given to self-financing projects such as the ports and power projects and the refinancing of public debt to reduce the cost of borrowing.