Ghana to issue $1.5bn Eurobond

Jul 23, 2015

This represents a 50 per cent increase on the $1 billion issue that was originally planned.

Ghana's deputy finance minister Cassiel Ato Forson announced on Tuesday (July 22nd)
that the government wants to issue a $1.5 billion (€1.37 billion) Eurobond for debt financing and budget support.

The sum represents a 50 per cent increase on the $1 billion issue that was originally planned for June, but has now been pushed back to September.

The new amount was approved by the International Monetary Fund, according to a senior government official quoted by Reuters.

Ghana already raised one billion dollars in September 2014 through a Eurobond oversubscribed with orders of up to $3 billion.

In March, Moody's dropped the sovereign rating of Ghana from "B2" to "B3", with a negative outlook.

The US agency justified this decision by citing the country's growing debt burden. "The first driver of the downgrade is Ghana's deteriorating fiscal strength as reflected in the significant increase in the government debt ratio to an estimated 67.2 percent of GDP in 2014 from 54.8 per cent in 2013," it said in a statement.

"The negative outlook reflects further downside risk to the country's debt dynamics and liquidity pressure in the short-term if the country's policies fail to successfully contain its fiscal deficit, stabilise its currency and address current impediments to higher economic growth," it added.

In October 2014, Standard & Poor's also lowered the rating of Ghana to "B-", a level similar to the one recently awarded by Moody's.ADNFCR-2976-ID-801795204-ADNFCR