GHANA
GOVT
ISSUES
5
YEAR
BOND
Accra,
Dec.
13,
Ghanadot.com
–
The
government
on
Wednesday
issued
a
five-year
bond
in
furtherance
of
efforts
to
strengthen
and
deepen
the
development
of
the
domestic
capital
market.
A
statement
issued
by
the
Bank
of
Ghana
(BoG)
said
it
was
against
the
background
of
strong
macroeconomic
fundamentals.
“The
objective
of
the
issue
is
to
extend
the
yield
curve
of
Government
securities
beyond
the
current
3-year
horizon,
provided
by
the
Government’s
3-year
fixed
rate
bond,
the
statement
added.
It
explained
that
under
the
envisaged
issue,
a
total
amount
of
650
billion
cedis
will
be
floated
in
5-year
bonds.
It
will
have
the
features
of a
normal
conventional
bond
with
a
fixed
coupon
rate
and
interest
payment
on
half-yearly
basis
from
the
issue
date.
Financial
experts
and
industry
have
long
expected
such
an
instrument
listed
as a
factor
that
lowers
inflationary
pressures
on
the
economy.
The
bond
will
be
issued
through
the
auction
process
at
which
investors
will
be
requested
to
quote
their
desired
yields.
Interest
rates
for
the
bonds
will
therefore
be
determined
at
the
auction
from
the
bids
submitted
by
investors.
The
security
shall
be
listed
on
the
Ghana
Stock
Exchange
for
secondary
market
trading.
The
BoG
statement
said
for
the
first
time,
participation
in
the
bond
is
open
to
both
resident
and
non-resident
investors
to
expand
the
investor
base.
The
issue
of
the
5-year
bond
before
the
end
of
the
year
means
that
the
market
will
enter
2007
with
benchmark
instruments
and
a
yield
curve
up
to 5
years.
This
will
give
a
big
boost
to
the
bond
market
in
Ghana
. It
will
provide
the
necessary
guidance
to
both
public
and
private
corporates,
who
desire
alternative
sources
of
long-term
financing
to
expand
productive
capacities,
to
borrow
from
the
market
through
the
issue
of
bonds.
Such
issues
could
be
for
maturities
of
at
least
up
to 5
years
or
more
depending
on
the
nature
of
the
project
to
be
financed.
“These
will
be
easily
priced
with
reference
to
the
government’s
risk
free
yield
curve
that
will
emerge
from
the
various
Government
instruments
that
have
been
issued.”
Mr
Kwadwo
Baah-Wiredu,
Minister
of
Finance
and
Economic
Planning
said
the
issue
was
timely
and
would
free
extra
funds
to
government
for
infrastructure
development.
“It
eases
pressure
on
available
funds
and
lifts
problems
on
cashflow.”
Mr
Baah-Wiredu,
he
explained
that
the
successful
issue
and
the
expected
investment
from
the
investing
public
would
impact
significantly
on
development
because
of
the
availability
of
long
term
funding.
The
Finance
and
Economic
Planning
Minister
said
it
was
a
good
thing
since
loans
from
the
World
Bank
and
African
Development
Bank
have
40
and
50
year
period,
and
such
issues
would
provide
more
money
for
repayment.
Ghanadot.com
