Ghana has not abandoned plans to issue a Eurobond this year, Finance Minister Seth Terkper has said.
“What we did was to suspend pricing because considering the money in the stabilisation fund and the bonds that were issued last year, we took off the bond because the prices that we were seeing were not right,” he stated, adding: “With the stabilization, we have been able to create the sinking fund whenever we put a cap on the stabilisation fund, in order that we can use it as one of the instruments for tackling our debt problem. We have already used 33 million dollars of the sinking fund to buy securities; for the first time Ghana has bought its own bonds on the secondary market. It is this fund that enabled us to suspend pricing; we did not call off the 2016 Eurobond as was widely circulated,” Mr Terkper said when he addressed this year’s Ghana Economic Forum on Wednesday, 17 August 2016.
Af.reuters reported a couple of weeks ago that Ghana said it will not to go ahead with a $500 million Eurobond issue, and while it gave no reason for the decision, investors said it had likely balked at the higher yields fund managers had demanded of the junk-rated credit.
Af.reuters said rated B3/B minus, six notches below investment-grade, Ghana had planned to issue an amortising bond with a weighted average five-year tenor in conjunction with a tender offer to buy back some dollar bonds that mature next year.
In a statement, Ghana said “it will continue to monitor markets in the context of a potential new issue” and thanked investors “for their positive feedback”.
Ghana said it would still proceed with the capped cash tender offer of up to $100m on its 2017 notes. The deadline for that offer is Friday.
Source: af.reuters
