As anticipated, Ghana’s 2020 Eurobond has been oversubscribed by almost 350% as investors hugely bid more than US$14 billion, sources have revealed.
The country was looking for US$3 billion but strong economic fundamentals coupled with recent Moody’s favorable ratings of the Ghanaian economy, as well as a positive assessment of the Ghanaian economy by the International Monetary Fund triggered huge investor interest.
Few hours to the closing of the bidding, classfmonline.com gathered many more investors were putting in their bids.
Though it is unclear the coupon rates agreed for the three tranches of debt instrument, 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% whilst 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 favorable 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.
Economist and Director ISSER, Professor Peter Quartey had earlier said the high confidence in the Ghana economy coupled with the IMF successful programme indicated that Ghana will attract a favorable 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 eight Eurobond.
Databank, Fidelity Bank, IC Securities, GCB Bank and SAS Finance Group were the Co-Managers.
The Finance Minister is expected to announced the results shortly. Source: classfmonline.com