Ghana raises $3 billion from longest-dated African bond

BY: uk.reuters.com
Ghana's Finance Minister, Ken Ofori-Atta
Ghana's Finance Minister, Ken Ofori-Atta

Ghana has raised $3 billion from a Eurobond auction of hard-currency debt which was five times oversubscribed.

Reuters reports that the country sold $1.25 billion in seven-year bonds at a coupon of 6.375% in Tuesday’s sale, as well as $1 billion in 15-year bonds with a coupon of 7.875% and $750 million in 41-year paper with a coupon of 8.875%.

The 41-year paper is the longest-dated bond for an African country, the government said in a statement.

Ample liquidity in financial markets and historically low-interest rates among major central banks around the globe have seen borrowing costs come down in many emerging markets.

Ghana’s outstanding dollar-bond maturing in 2051 currently yields just over 8.6%.

The government statement cited Finance Minister Ken Ofori Atta as saying the lower debt yields reflected a reduced risk premium because of improving economic conditions in Ghana, which produces oil, cocoa and gold.

The West African nation has enjoyed some economic stability since the conclusion of a three-year International Monetary Fund loan programme last year, though the government expects economic growth to slow and the budget deficit to rise in 2020.