Investors ditch Ghana's $1.5 bil Eurobond; Govt leaves with nothing

quist

October 5, 2015 7:41 AM

The bond's roadshow in Europe which ended last week, can easily be described as the worst in recent years as investors showed poor interest in the bond.

The ministry of Finance has been forced to abandon the issuance of the much anticipated 1.5 billion dollar- Eurobond.

The ministry of finance reveals that only few investors were interested in buying the bonds, and at exhorbitant interests rates of 11 percent.

This is way higher than the coupon rates of 8 and 8.5 per cent for its last two billion dollar- bond issues.

This development vindicates the projections of analysts Pulse Business interviewed before the issuance the Bond. Lecturer at the Banking and Finance Department of the University of Ghana, Dr. Laud Mensah shared his skeptisism over the success of the bond issuance given the current economic challenges the country was going through.

Head of research at investment firm, Groupe Nduom, Samuel Ampah also predicted that government would get a much worse interest rate than in the previous Eurobonds the country issued in the last two years.

It is however unclear what the next step for the Ministry of Finance will be. Minister Seth Tekper, before the roadshow, emphasized how it important the 1.8 billion dollar Eurobond is to the stabilisation of the 2015 budget and the stabilisation of a very unstable local currency.

What does the failure of the Eurobond mean? Keep an eye on Pulse Business for all the necessary analysis.

Enhance Your Pulse News Experience!

Get rewards worth up to $20 when selected to participate in our exclusive focus group. Your input will help us to make informed decisions that align with your needs and preferences.

I've got feedback!

quist