Ghana to pay record high interests for GH¢500mil- bond

Ghana Cedis. Investors maintained that the country had already taken on too much debt for comfort. Currently, the country's provisional total debt stands at 92.2 billion Ghana Cedis, close to 30 billion Dollars.

___4400424___https:______static.pulse.com.gh___webservice___escenic___binary___4400424___2015___11___27___14___Seth+New

Due to dwindling confidence in Ghana's credit worthiness, investors have pushed for an all-time-high interest rate for the country's 5- year cedi bond.

Investors pushed for a three-year high of 25 percent on Thursday in an attempt to raise 500 million Ghana Cedis.

Investors maintained that the country had already taken on too much debt for comfort. Currently, the country's provisional total debt stands at 92.2 billion Ghana Cedis, close to 30 billion Dollars.

Ghana was able to raise 516.5 million cedis from the issuance, under the strategic leadership of Barclays Plc, Stanbic Bank Ghana Ltd. and Strategic African Securities Ltd.

This 516.5 million Cedi bond is the second floated by the country in 2015, driven by the need to restructure its maturing debt. In March government issued a five-year cedi bond at a rate of 21 percent“A lot of investors are concerned about the level of public debt and its outlook,” Sampson Akligoh, managing director of Accra-based InvestCorp Ltd., an investment bank and money manager, said to Bloomberg.President John Dramani Mahama’s administration is having to boost borrowing to fund a budget deficit with the economy headed for its slowest expansion in more than 20 years because of a slump in commodity prices and a power shortage that leads to rolling blackouts. The government’s debt rose to 69 percent of gross domestic product in September from 60 percent in January.The central bank unexpectedly raised its benchmark interest rate by 1 percentage point to 26 percent on Nov. 16 to help rein in inflation sparked by a 15 percent slump in the currency this year. The cedi gained 0.8 percent to 3.7946 per dollar as of 4:41 p.m. in Accra.Investors sought 644 million cedis of the debt during the sale, which for the first time was done through a book-building process rather than being arranged by the central bank.

JOIN OUR PULSE COMMUNITY!

Eyewitness? Submit your stories now via social or:

Email: eyewitness@pulse.com.gh