Gov’t Borrows GH¢400m From 3-Yr Bond Issuance

Government is seeking to borrow an amount of GH¢400 million from both local and foreign investors to manage liquidity and service its debt, among others.

In line with this, the Bank of Ghana (BoG) is inviting bids for the issuance of Government of Ghana 3-year fixed rate bonds on behalf of the Government of Ghana through an auction process.

A press release issued by the Central Bank dated April 20, 2015 and signed by Thomas Tettey for its Secretary, said the instrument will be Ghana cedi-denominated and will be issued at par while each bond shall have a face value of one Ghana cedi with a minimum bid of GH¢50,000 and multiples of GH¢1,000 thereafter.

The 3-year fixed rate bond shall be available to both resident and non-resident investors.

The security shall be listed on the Ghana Stock Exchange (GSE) for secondary market trading both at the floor of the Exchange or over the counter (OTC).

Trading in the securities is subject to the listing rules of the GSE for Government Securities.

The bond shall be redeemed by the issuer on the maturity date, which shall be April 23, 2018.

Interest on it would be paid semi-annually from the issue date i.e. in October and April and the amount of interest paid on every coupon payment date shall be equal to the principal amount at the coupon rate for half-year.

This is the first half-year 3-year fixed rate bond issued by Government for January-July 2015.

The Central Bank stated that it would withhold tax in respect of interest payments to resident corporations holding bonds on their own account at the rate of 8 percent of the gross amount of the payment.

Interest paid to a non-resident holder (individual and institution) on bonds issued by the Government of Ghana is exempt from tax.

Source: Daily Guide