Investors are loving Ghana’s bond offerings as sales exceeds expectations

Ghana sold all its 1.57 billion cedis ($356.3 million) worth of 3 years bonds on Thursday. The bond is scheduled to mature in 2021.

The bond which was open to Ghanaians residing outside the country was to be sold at the range of 15.5 percent and 16.5 percent but according to Joint transaction arrangers, it was eventually sold at 16.5 percent. Initially, the government hoped to raise over $203 million (900 million cedis) settlement for the fresh bond sale but with investors loving the bond as it sale surpassed expectations like it did on the international market in 2016. In 2016, the WestAfrican successfully raised a $750 million at a yield of 9.25 percent in a Eurobond sale which was more than 5 times oversubscribed.

African nations like Ghana and South Africa are looking to sell many debts as they can before yields increase as a result of the U.S. Federal Reserve’s policy-tightening path. The West African country is the first African country to co-list a Eurobond on the local exchange as its 10-year Eurobond in 2016 was listed on the Ghana Stock Exchange to afford local, foreign and prospective investors the opportunity to buy and trade on the secondary market.

Ghana plans to issue a total of 11.13 billion cedis between January and March 2018 of which 8.96 million cedis are rollovers to restructure maturing debt. In February, Ghana sold 1.99 billion cedis ($448 million) domestic bond of which the major commodity exporter is to pay a yield of 16.5 percent.

Ghana is working towards reducing its budget deficit, inflation and public debt, which hit 68 percent of its GDP in 2017 and the country is in the final year of a $918 million credit deal it had with the International Monetary Fund. According to Reuters, lawmakers in the West African country will vote on Friday regarding government’s plan to issue $2.5 billion in sovereign debt by June of which $1.5 billion will be used to retire liabilities.

The Thursday bond issuance was arranged through a joint book-building by Barclays Ghana, Fidelity Bank, Databank, Stanbic Ghana and financial house IC Securities.