Ghana set to is­sue an­other Eurobond

Daily Trust - - BUSINESS - From Kate Da Costa in Ac­cra

Ghana’s Fi­nance Min­is­ter, Hon. Seth Terkper has hinted of an­other Eurobond is­sue, barely a month af­ter it went to the in­ter­na­tional mar­ket to raise $1.5 bil­lion.

Terkper in­di­cated at the week­end that gov­ern­ment was work­ing to is­sue an­other Eurobond be­fore the end of 2015.

Ac­cord­ing to the min­is­ter, the regime was con­strained to is­sue an­other bond af­ter it failed to raise the en­vis­aged $1.5bn. The Par­lia­ment of Ghana had given leg­isla­tive ap­proval for the is­sue.

But gov­ern­ment could only raise $1bn at an in­ter­est rate of 10.75 per cent from the in­ter­na­tional financial mar­ket last month. Gov­ern­ment plans to use the pro­ceeds from the bond to fi­nance both lo­cal and ex­ter­nal debts.

Ac­cord­ing to re­views from ex­perts, “the cur­rent ma­tu­rity pro­file of the na­tion’s do­mes­tic debts posed a num­ber of chal­lenges that in­cluded high risks as­so­ci­ated with fre­quent rollover of short and medium term debts, be­cause of volatile in­ter­est rates.

“The ma­tu­rity pro­file of pub­lic debt in­di­cates 75 per cent of do­mes­tic was short term to medium term, with short-term debt con­stantly 39 per cent of the coun­try’s debt port­fo­lio which stood at GHC 94.5bn by Au­gust 2015.

Terkper at a me­dia brief­ing in­di­cated that gov­ern­ment in­tended to take ad­van­tage of a win­dow in the financial mar­ket to raise the re­quired funds to man­age its overbloated pub­lic debts.

Mean­while in­ter­na­tional rat­ing agency, Moody, has as­signed a pro­vi­sional B3 for the bond, as­sign­ing a high risk sta­tus to it.

A car as­sem­bly plant in Nige­ria.

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