Domestic Bond BoG to issue GH¢500 million domestic bond

Each bond shall have a face value of one Ghana cedi.

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Each bond shall have a face value of one Ghana cedi. play

Each bond shall have a face value of one Ghana cedi.

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The Bank of Ghana will issue a GH¢500 million domestic bond on Thursday May 26 to enable government restructure its debt and for maturity settlement.

The instrument will be Ghana cedi-denominated and will be issued at par.

It shall bear a coupon rate equal to the highest competitive bid accepted at the auction for the security.

The coupon rate so fixed shall carry throughout the term of the security, according a statement on its website.

Each bond shall have a face value of one Ghana cedi.

The move is in accordance with the Issuance Calendar for Government of Ghana Securities for May, 2016.

The Bond has a minimum bid of GH¢50,000 and multiples of GH¢1,000 thereafter shall have a face value of GH1.

In January, government issued a similar domestic bond which was under-subscribed.

While government wanted a total of 500 million Ghana Cedis, it was able to raise only 426 million Ghana Cedis by the end of the issuance of the bond in total offers. 

Out of this, the Bank of Ghana took 373 million Ghana Cedis at an interest of 24.75 percent, something that has sparked concerns amongst analysts because  the rate is higher than the country's last interest in the last domestic bond issue where government got a 23.85 percent.

Whereas some analysts thinks the situation suggests that investor confidence in the Ghanaian economy, others believe it’s as a result of the U.S interest rate hikes.

But country director of investment firm, C-Nergy Ghana, Mike Cobblah in a conversation with Joy FM  the under-subscription to timing.

He explained that most of the foreign investors are now returning from the holidays.

“This is just the first week of January, and most investors are still not at work yet, when you issue a bond at this time the interest from foreign investors might not be good.”

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