Story by: Fred
Yaw Sarpong
Ghana is becoming an investment destination to both
individual and corporate investment entities in the world. Investors have
express confidence in Ghana’s economy and are making their investment
opportunity to the country.
In
order to be able to development this country, the management (government) of
this country went to international market to raise money for it development.
Daily Express gathered that the team from Ghana engaged institutional investors, and
fund managers from San Francisco, Los Angeles, London, Frankfurt, New York and
Boston.
Ghanaian officials, led by the Minister
of Finance Mr. Seth Terkper managed to raise US$1 billion from the
international capital markets for Ghana. This was oversubscribed by 100%.
The over subscription is an indication
of the level of confidence the international financial community has in the
Ghanaian economy. The economy over the past year has received positive ratings
from the international rating agencies. Moody rated Ghana as B1, Standard and
Poor B, while Fitch rated the economy as B+.
According to a statement released in
Accra and copied Daily Express by the Public Relations department of Minister of
Finance stated that the issue totalled US$750 million for cash with maturity
period of 10 years with a coupon rate of about 7.9%, which expected to be paid
semi-annually.
It further noted that, an offer is to
be made to holders of Ghana’s first Eurobond to exchange into the new bond
which will result in the issue of an additional amount of up to US$250 million
of the new bond bringing the total of the new issue to US$1 billion.
The bond will be listed on the Ghana
Stock Exchange (GSE) and the Irish Stock Exchange (ISE); the first Eurobond to
be listed on a local stock market in Sub-Sahara Africa except South Africa.
The statement said ‘this is also the
first time Ghanaian companies have had the opportunity of buying government
Eurobonds (EDC Stock Brokers and Strategic African Securities).’
Government had earlier indicted that
proceeds from the bond are to be used to finance counterpart funds for capital
projects as well as to finance capital expenditures approved in the 2013
Budget.
Priority will be given to
self-financing projects such as the ports and power projects. It is also to be
used to refinance public debt to reduce the cost of borrowing.
This is the second time Ghana is
raising bonds on the international market. The first was in 2007 when the
country raised an amount of US$750million at a yield of 8.5%.
The lead Managers for
this transaction are Barclays Bank and the Citi Group with the Co-Managers
being EDC Stock Brokers and Strategic African Securities. The international
legal counsel is SN Denton and the local legal counsel is JLD and MB Legal
Consultancy.
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