About 80 percent of bonds that were issued recently by government to raise GH�300 million were subscribed by foreign investors leaving the remainder to local investors.
The auction recorded inflows of GH�1,070 million with government receiving GH�898 million at a coupon rate of 23 percent, representing a decrease of three percent. The issue of bonds has been oversubscribed by 257 percent.
Being the second five-year bond issued this year, analysts say it would help government to fund on-going road and other infrastructural projects but government indicated that the inflows would help stabilize the Ghana cedi.
�Government raised the bond to primarily pay off some outstanding commitments and given the over-subscription, the additional funds accepted above the GH�300 million would be used to restructure the domestic debts by lengthening the maturity profile in line with the debt management objectives,� a press release from MOFEP has said.
Dr Kwabena Duffuor, Minister for Finance & Economic Planning emphasized: �This clearly demonstrates the confidence that investors have in the Ghanaian economy and also the huge foreign investor participation in the auction, which is an indication of the strong appetite that foreign investors have for Ghanaian risk.�
The yield on Ghana�s 91-day bills stood at 22.95 percent at its last weekly auction during which the Bank of Ghana accepted bids worth GH�388.11 million.
Total bids received for the five-year paper were more than 1 billion cedis, the highest so far,� Head of Treasury Adam Nyinaku said, adding that about 90 percent of tendered bids came from offshore investors who also accounted for 96 percent of bids accepted.
Source: Daily Guide
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