Government will pay an interest rate of 22.30% and 21.50% for the 5-year and 2-year bonds issued on Friday, 6th May, 2022.
The sale of the debt instruments were extended to Friday, May 6th, 2022 to accommodate for the Labour Day and the Eid holidays last week.
The interest rate, which will probably increase the country’s interest payment will be paid semi-annually, until maturity in 2027 and 2024 respectively.
Until recently, government was paying between 19% and 20.50% for medium term financial instruments.
However, the sale of the debt instruments recorded mixed subscriptions, signaling further perceived risks in the economy.
According to the trading results published by the Bank of Ghana, government mobilised ¢601.9 million from the 2-year bond at an interest cost of 21.50%, whilst ¢575.4 million was secured from the 5-year bond at an interest rate of 22.30%.
This means that about ¢1.4 billion of the maturing amount were redeemed by the investors who held the maturing 2-year bond.
For the 5-year bond, there wasn’t any target set since it was a new issuance.
However, with regard to the 2-year bond, government was seeking to rollover ¢2 billion.
Analysts say though the interest rate for the debt instruments were high, they were within the pricing guidance.
They however attributed the shortfall in the sale of the bond to extremely tight liquidity on the market, since the Bank of Ghana’s monetary measures kicked-in on April 1st, 2022.
In addition to the tight liquidity, there are also investors who remain concerned about the inflation uncertainty and the implications of the rising inflation on their real returns. These investors tend to hold on for higher nominal yields to be able to compensate for the inflation risks.
Absa, Black Star, CalBank, Databank, Ecobank, Fidelity, GCB, IC Securities and Stanbic were the book runners.
Latest Stories
-
Gold Fields Ghana Foundation challenges graduates to maximize benefits of community apprenticeship programme
8 mins -
GBC accuses Deputy Information Minister Sylvester Tetteh of demolishing its bungalow illegally
20 mins -
Boost for education as government commissions 80 projects
31 mins -
NAPO commissions library to honour Atta-Mills’ memory
42 mins -
OmniBSIC Bank champions health and wellness with thriving community walk
43 mins -
Kora Wearables unveils Neo: The Ultimate Smartwatch for Ghana’s tech-savvy and health-conscious users
48 mins -
NDC supports Dampare’s ‘no guns at polling stations’ directive
50 mins -
Police officer interdicted after video of assault goes viral
1 hour -
KNUST’s Prof. Reginald Annan named first African recipient of World Cancer Research Fund
1 hour -
George Twum-Barimah-Adu pledges inclusive cabinet with Minority and Majority leaders
2 hours -
Labourer jailed 5 years for inflicting cutlass wounds on businessman
2 hours -
Parliament urged to fast-track passage of Road Traffic Amendment Bill
2 hours -
Mr Daniel Kofi Asante aka Electrician
2 hours -
Minerals Commission, Solidaridad unveils forum to tackle child labour in mining sector
2 hours -
Election 2024: Engagement with security services productive – NDC
2 hours