Ghana plans to pay issuer-desired yields following $2 billion worth Eurobonds sale

Ghana plans to pay issuer-desired yields after it sold $2 billion worth of dual-tranche Eurobonds with 10- and 30-year maturities on Thursday.

According to unnamed government and transaction sources who spoke to Reuters, the West African country sold the $2 billion Eurobonds at issuer-favoured yield. The country sold $1 billion each of the 10-year notes maturing in 2029 and a 30-year with 2049 maturity at 7.625 percent and 8.625 percent, respectively.

The notes that were first marketed in the low 8 percent area yield and low 9 percent mark had their guidance set at 7.75 percent to 7.875 percent for the May 2029 bond and at 8.75 percent to 8.875 percent range for the May 2049 bond.

Lead Advisers for the sale including Bank of America Merrill Lynch, Citigroup, JP Morgan and Standard Chartered reported that the total books passed is $5.5 billion and was evenly split between the two tranches.

Giving an insight into the development, a sovereign debt market watcher told Reuters that “it’s a marked success for Accra because they got a low yield and a bigger size. The pricing revision may have aided the deal and left investors unhappy.”

Prior to this development, Ghana had raised its target for the sale of Eurobonds to as much as $2.5 billion, after it said in February that it may issue as much as $2 billion on foreign debt. The country’s Finance Minister Ken Ofori-Atta told Bloomberg that Ghana intends to use $1 billion as a strategy to plug its 2018 budget hole and another $1.5 billion to refinance dollar debt.

The Thursday sale by Ghana is its sixth sale since a 2007 debut. Ghana 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 successfully issued new Eurobonds in 2016, raising $750 million at a yield of 9.25 percent that was more than five times oversubscribed.

Ghana is in the league of African nations including continental peers Angola, Kenya, Egypt, Nigeria, South Africa, Senegal and Ivory Coast looking to sell debt before yields increase as a result of the U.S. Federal Reserve’s policy-tightening path.