Government secures ¢408.7m from 3-year bond at 20.85%

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Government secured ¢408.7 million from the sale of the 3-year cedi denominated bond auctioned on 7th April, 2022.

According to the auctioning results from the Bank of Ghana, government accepted all the bids for the debt instrument which did not have a targeted amount.

The bond was sold at an interest rate of 20.85% to investors.

This is however higher than the Initial Price Guidance of 20.65% and also expensive than the 5-year bond issued last month at a price of 20.75%.

But, most analysts believe the coupon rate was within the secondary market pricing for 3-year financial instruments.

Joy Business also understands that non-resident or foreign investors did not particpate in the auctioning of the government bond.

This is due to the perceived risk of the economic outlook of the country by investors.

Presently, domestic interest payments accounts for about 78% total interest payments.

This could be welcoming because majority of the payment will be done in cedis, whilst demand for dollars or foreign currency will be relatively low.

With the prevailing upside risks to domestic interest rates, aggressive control of government spending is very important since the era of cheap money is over.

The 3-year bond will mature in April 2025.

Absa, Black Star, CalBank, Da Databank, Ecobank, Fidelity, GCB, IC Securities, Stanbic were the sponsoring firms or bond market specialists.


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