Ghana Raises $2 billion ‘At Lowest Rates’ In 2018 Sovereign Bond Issue

Ghana’s 2018 sovereign bond issuance has raised $2 billion at the lowest rates on the international capital markets, a statement from the Finance Ministry has said.

The 10-year bond raised $1 billion at 7.627% while the maiden 30-year bond raised another $1 billion at 8.627%.

For an emerging market, the feat has been described by many as laudable.

The last 5-year bond issued by the erstwhile National Democratic Congress (NDC) administration cost Ghana a coupon rate of 9.25%.

Investors, however, say the improved economy reduces the risk associated with Ghana’s debt and thus they can afford to lower coupon rates.

This comes even after Markets were turbulent following rate hikes by Argentina and Turkey in recent weeks as well as rising interest rates in the United States causing fears that the issuance could cost Ghana more.
Improved conditions

Government officials on the roadshow team say the latest deal is a reflection of the improving Ghanaian situation for which reason the country is benefiting from lower rates despite recent turbulent activities on the emerging Markets front.

These cheaper bonds are expected to help the country pay off the expensive bonds issued by the previous administration and save Ghana money which can be invested in job dense initiatives.

Investors, according to government officials, have expressed increased confidence in the early turn around signs and have chosen to reward Ghana for it.

A statement released by the Ministry of Finance said the transaction represents the first time a sub – Saharan country with a rating of B stable has priced a sovereign Bond at such low costs indicating a strong investor confidence.

The statement further said it is also the first time Ghana has extended its international capital market funding to 30 years.

Officials were also grateful to the Parliament of Ghana for approving the transaction as well as the Bank of Ghana and the international joint lead managers who assisted in the transaction.


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