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.
Education4 weeks ago
Prof. Badu Akosa, Ashigbey, Egyekumhene, Others join Board of MOSES Foundation
General News4 weeks ago
107th IDIF : $35m pharmaceutical plant opens
Entertainment3 weeks ago
Vody Vodka Energy Mix: Energy Drink Of Destruction
Company/Corporate News7 days ago
Abola Traditional Council affirms support for Jospong Group
General News3 weeks ago
CEIA boss cautions mining communities on health consequences of mining
AgriBusiness2 weeks ago
Fairtrade report explores possibilities for accelerating progress on sustainable livelihoods for Ghanaian cocoa farmers
Company/Corporate News3 weeks ago
JICA Trains and Donates to Immigration Officials and Ghana Health Service
General News3 weeks ago
Perseus Mining, businessman clash over TV set, refrigerator