Ghana issues €122 million bond

Jan 07, 2016

Proceeds from the bond will be used to restructure debt.

Ghana's central bank has announced it will issue a GH₡500 million (€122 million) bond today (January 7th) to restructure debt and fund government projects. Proceeds from the bond, which is open to offshore investors, will be used to settle maturing papers, the bank said in a statement seen by Reuters.

The new bond issue follows a $1 billion (€880 million) Eurobond launched in October 2015.

Finance Minister Seth Terkper said in a statement this was the second sub-Saharan country after South Africa to issue a 15-year bond, adding that the bond was 100 per cent oversubscribed, which is showing a "high appetite for Ghana's credit".

Ghana already raised $1 billion in September 2014 through a Eurobond oversubscribed with orders of up to $3 billion.

This led Moody's to drop 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 per cent of GDP in 2014 from 54.8 per cent in 2013," it said in a statement.

Interest rates in Ghana are among the highest in the region and its total public debt is now standing at around 70 per cent of GDP.ADNFCR-2976-ID-801809453-ADNFCR