Ghana will not proceed with five-year local currency bond

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In a note to investors seen by Reuters, Ghana’s government decided not to proceed with a planned 5-year currency bond due to unfavourable market conditions. The Finance Ministry planned to issue the bond to roll over maturing debts through book building, with initial pricing guidance set at 20.5 percent to 21.5 percent. The pricing was later revised to 19.75 percent to 21 percent.

In an interview with Reuters, a senior Finance Ministry official said the pricing for the bond was too high and the markets are too volatile.

A note to investors revealed that “due to current market conditions, the issuer has decided not to proceed with the proposed September 2018, 5-year Treasury bond issuance (rollover) at this time. We thank you for your interest”.

Book builders for the bond, which was also open to non-resident Ghanaians, were Barclays, Stanbic, Databank, Fidelity bank and brokerage firm IC Securities.

To narrow fiscal deficit, stabilise its currency, and reduce debt, Ghana, which exports cocoa, gold and oil, is in its final year of a $918 million aid deal with the International Monetary Fund (IMF). According to ratings agency Moody’s estimate, debt will rise above 70 percent Gross Domestic Product (GDP) by the end of December 2018.

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