Govt appoints Citi and Barclays as Eurobond managers

The government has appointed Citi Bank and Barclays Bank as lead managers of the country’s second issue of Eurobond to raise up to $1 billion.
The government also appointed EDC Stockbrokers and Strategic African Security as Co-Managers or local investment banks to the transaction which will raise funds from the international market, the second time Ghana is walking this path.

The first time was in September 2007, when Ghana successfully raised $750 million on the international market in a transaction hugely oversubscribed.

The Minister of Finance and Economic Planning, Mr Seth Terkper, who announced this at a meet the press series in Accra today, explained that proceeds from the bond would be used to refinance public debt to reduce the cost of borrowing.

Part would also be used as counterpart funds for capital projects such as the Atuabo Gas Processing project as well as to finance capital expenditures approved in the 2013 Budget with priority to self-financing projects such as ports and power projects.

He said based on the advice of the Transaction Team, the government also appointed SN Denton as international legal counsel and JLD & MB Legal Consultancy as the local legal counsel.

July 2013 has been fixed as the tentative time for issuing the bond.

The minister dispelled rumours that the proceeds would not be used for recurrent expenditures but to lengthen the tenor of domestic debts as reduce the burden on the budget.

Government as part of debt management policy in the 2013 Budget Statement and Economic Policy indicated its intention to extend the maturity profile of the public debt by diversifying her sources of funding for major infrastructure projects and for other specified purposes including tapping the global bond market. 

Cabinet approved the constitution of a Transaction Team towards the issue of the sovereign bond comprising the Ministry of Finance and the Bank of Ghana to manage the preparatory activities for the issue.

Mr Terkper said the team offered advice leading to the appointment of the following in accordance with the Public Procurement Act, adding that based on anticipated market conditions and financing needs, a transaction size of up to $1billion was recommended to and approved by Cabinet.

“It should be noted that the transaction is subject to prior approval by Parliament. The exact amount is also subject to variations that might be dictated by market conditions and parliamentary approval,” the finance minister explained.

He was hopeful that the bond would survive in favourable external conditions, especially with a strong investor appetite still hovering around the 2007 eurobond the country issued.

By Samuel Doe Ablodeppey/Graphic Business