$3bn Eurobond cash to hit BoG's account by next week

The Finance Minister Ken Ofori Atta has disclosed that all other things being equal the $3 billion Eurobond money would hit Bank of Ghana’s account next week.

This according to him would significantly increase the country’s international reserves.

He added that “Government is committed to supporting the Bank of Ghana to firmly stabilize the cedi throughout the year and even beyond”.

Mr Ofori-Atta noted that another $300 million would hit their accounts coming from the planned mining IPO in March.

Speaking to Joy FM in London, Finance Minister Ken Ofori Atta attributed the oversubscription of Ghana’s Eurobond to high investor confidence in the economy.

Mr Ofori-Atta said the results also show that investors are also satisfied with the government’s fiscal commitment, especially in an election year.

Mr Ofori-Atta said, “This is also a sign of market confidence in the long term prospect of the economy.”

He also added the results of the offer have also demonstrated the government’s ability to manage the economy even after the completion of the IMF program completion.

“Don’t for forget going into this offer, there were concerns about timing, an election year, and you would have expected some hesitancy, but all these did not affect interest in the Eurobond”.

READ ALSO : Global Markets 5x oversubscribed Ghana’s 3bUSD Eurobond

Mr Ofori-Atta added that “our responsibility now is to continue to be on course and manage the macro’s, the fiscals and look at ways to increase revenue to help sustain this investor confidence.” However, the minister added that he strongly believes that they are on course.

Details of Eurobond offer in London

 

 

Global Capital markets on Tuesday further voted confidence in the Ghanaian Economy with a five times over-subscription of the countries 3 Billion USD Eurobond sale at very low rates comparatively.

While Ghana went to the Markets to raise 3b USD, investors responded with a 15b USD offer for Ghana’s new coupon rates.

Market watchers were initially worried Ghana may achieve little success in trading the new bonds at rates cheaper than the 7.88% and 8.13% of last year for 7 and 12-year bonds, the West African country further surprised watchers by pulling off 6.375% and 7.875% for 7 and 15year bonds respectively. Additionally, Ghana sold a 41-year bond at a coupon of 8.875%, this will be the longest dated bond for an African Country. In 2019 the country sold a 31year bond at 8.95%.

Finance Minister, Ken Ofori Atta, who led Ghana’s team commented that the lower rates reflected Ghana’s further reduced risk premium demanded by the capital markets as a result of the consistently improving economic conditions. He further commented that the five times oversubscription for the bonds represents very buoyant confidence in Ghana’s medium to long term economic growth prospects especially given the wider turbulence in the international capital markets due to the ongoing coronavirus epidemic.