Ghana’s Eurobond oversubscribed by nearly 350%

Ghana’s 2020 Eurobond has been oversubscribed by almost 350% – over US$14 billion.

The country was looking for US$3 billion but strong economic fundamentals coupled with Moody’s’ recent favourable rating of the Ghanaian economy, as well as a positive assessment of the Ghanaian economy by the International Monetary Fund, triggered huge investor interest.

With a few hours to the closing of the bid, gathered that many more investors were putting in their bids.

Though it is unclear the coupon rates agreed for the three tranches of debt instruments, it is likely it will be in the region of 6 and 9.5%.

For the 7-year bond, the government was looking for a price range of between 6.5 to 7% while it expects between 8 to 8.5% for the 15-year bond.

The 41-year bond is expected to cost the nation a yield of between 9.125 and 9.375%, which many analysts will consider as favourable because it is a long-term bond.

Many have hailed the reprofiling of the bonds as significant as it will reduce payment of the interest costs as well as widen the maturity period for the principal payment.

An economist and director of ISSER, Professor Peter Quartey, had earlier said the high confidence in the Ghanaian economy coupled with the IMF’s successful programme, indicated that Ghana would attract a favourable interest rate on the Eurobond.

“We have come out of the IMF and if you look at the macro figures so far, it sends a good signal to the international community that, yes, we have what it takes, and I think we should be able to borrow at a fairly decent rate.”

JP Morgan Chase, Morgan Stanley, Bank of America Merrill Lynch, Standard Bank and Standard Chartered acted as the book-runners for the eighth Eurobond.

Databank, Fidelity Bank, IC Securities, GCB Bank and SAS Finance Group were the Co-Managers.

The Finance Minister is expected to announce the results shortly.


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