Pulse.com.gh logo
Go


Debt Situation Government pays high rate for Thursday's 1.35b cedi bond

Reports available to Pulse Business from the Central Bank reveal that foreign international investors make up 84.09 percent of the investors who showed interest in the bond.

  • Published: , Refreshed:

Government is set to pay a higher interest rate on the 3 -year cedi dominated bond issued on Thursday. The Bank of Ghana got a 24.5 percent fixed rate for the cedi denominated bond that was geared towards raising some GHC1.5 billion to restructure and retire maturing debt.

This figure is an increase from the 23.47 percent government paid on a similar bond in May.

Reports available to Pulse Business from the Central Bank reveal that foreign international investors make up 84.09 percent of the investors who showed interest in the bond.  The bank said it accepted GHC994.9 million ($262.5 million) in bids for the bond out of 1.35 billion cedis ($399 million) tendered.

"The result shows that there is international interest in cedi-denominated debt after the Eurobond but the yield shows investors are wary of the currency risk," Sampson Akligoh, managing director of InvestCorp investment bank in Accra, told Reuters.

Government earlier this year got approval from parliament to raise a maximum of 1.5 billion dollars on the Eurobond market. Government floated only 1 billion dollars at an unexpected rate of 10.75 percent coupon rate.

Subsequently, the deputy finance minister, Monah Quartey revealed her ministry will float a second bond to raise the rest of the  $500, 000.

Whereas concerns are rife over the country's debt situation, some economists have drawn a strong link between the country's debt situation and its fast depreciating currency. The Ghana Cedi has seen over 50 percent downward plummet between 2014 and 2015, which according to these economists mean, the country's debt situation would have worsened by a similar percentage since most of the debt portfolios are in foreign currencies.

Ghana was one of Africa's strongest economies for years due to revenues from its exports of gold, cocoa and oil. But the government estimates growth at 3.5 percent this year because of lower global commodities crisis and fiscal problems.

 

Do you ever witness news or have a story that should be featured on Pulse Ghana?
Submit your stories, pictures and videos to us now via WhatsApp: +233507713497, Social Media @pulseghana: #PulseEyewitness & DM or Email: eyewitness@pulse.com.gh.

Recommended Articles

Recommended Videos




Top Articles

1 Investment banks in Ghana Top 5 investment banks in Ghana and why you...bullet
2 Incompetence Otabil wasn't qualified to be Capital Bank Board Chairman...bullet
3 Breaking Otabil finally breaks silence on banking controversiesbullet
4 Salaries In 2018 Here are the dates public workers will be paid in...bullet
5 Education Top 5 private high schools in Ghana according to WAECbullet
6 Banking In Ghana Stranded customers of First Allied Savings &...bullet
7 Nana Appiah Mensah Menzgold CEO invited by EOCObullet
8 Nana Appiah Mensah Menzgold boss apologises to BoG after...bullet
9 Increment Fuel prices to go up again – IESbullet
10 Bank Collapse Capital Bank Board misused GHC 610...bullet

Top Videos

1 Forbes 2018 Africa's billionaires rich listbullet
2 Money Alert Meet Africa's richest womanbullet
3 New Discovery Ghana discovers new mineral, lithium in commercial...bullet
4 Former Capital Bank staff grills pork for survivalbullet
5 Plane Crash Starbow suspends operations following plane crashbullet
6 Dr Joseph Siaw Agyepong Nobody can collapse my company – JOSPONGbullet
7 Bozoma Saint John 10 quotes from Uber top official, Bozoma,...bullet
8 New Phones Nokia MWC 2018 Event in 5 minutesbullet
9 Support Finance minister buys Kantanka carbullet
10 Tech 6 reasons you should buy an iPhone SE instead of...bullet

Business