Ghana’s bid to raise $3 billion from the international capital market to finance key development projects, as well as retire maturing debts, has been over-subscribed by $16.9 billion at final pricing.
An initial order book of over $21 billion in bids was received, which means it was over-subscribed by seven times.
A $19.9 billion order book at final pricing is six times over-subscribed.
This is the highest ever for African sovereign bond because never in the history of sovereign bonds has an African country seen its bond over-subscribed six or seven times.
The over-subscription shows the level of confidence the international financial community has in the Ghanaian economy.
Concluding a very successful international sovereign roadshow, Ghana successfully raised $3billion in three tranches: seven years, 12 years and 31 years maturities.
The pricing are 7.875% for seven years, the lowest rate ever for Ghana; 8.125% for 12 years; and 8.95% for 31 years.
Foreign lead managers
The foreign lead managers for the transaction are Bank of America, Merrill Lynch and JP Morgan Chase & Co.
Morgan Stanley, Standard Chartered Plc and Standard Bank Group Ltd., Fidelity Bank Ltd., IC Securities and Databank Group are local co-arrangers.
$2 billion for infrastructure
According to officials from the Ministry of Finance, government will use $2 billion of the expected Eurobond fund to support government infrastructure budget in the 2019 expenditure pattern of the country.
$1 billion to clear maturing debts
The remaining $1 billion is expected to be used to clear maturing debts owed by government.
The Minister of Finance, Ken Ofori-Atta, is hopeful the issue of the Eurobond and the cocoa syndicated loan would help stabilise the cedi from further depreciating.
Impact on debt stock
For some, this exercise is very important because it could impact on the country’s total debt stock, which had reached ¢173 billion ending November 2018.
Source: The Finder