3-Yr Treasury Bond issuance opens today

Government has announced that the process for the issuance of its latest three-year treasury bonds will start today, with the opening of the book-build.

This follows release of an initial pricing guidance for the issuance of the bonds through the Ghana Stock Exchange.

This is according to an announcement made by the Bank of Ghana on Monday, January 13, 2020.

The Bonds will mature in 2023.

Per the government’s debt issuance calendar for the first quarter, an amount of GHc 1,000 million is expected to be issued in January and March, each.

Each bond to be issued shall have a face value of GHc 1, with a minimum subscription of GHc 50,000 and multiples of GHc 1,000 thereafter. The offer will be opened to both local and foreign investors.

Books are expected to be closed midday this Thursday, around 2:30 pm, with the final pricing and allocation determined.

Successful bids will be cleared at a single clearing level. However, in the event of oversubscription, there will be a discretionary allocation at the single clearing level. Investors are expected to be settled or issued with the bonds on Monday, January 16, 2020.

To this end, successful bidders will be allocated at the price at which they bid, whereas partial allocations will be made to bids at the cut-off price at the issuer’s discretion in the event of oversubscription.

Per its issuance calendar, Government aims to build benchmark bonds through the issuance of the different instruments, including the Three-Year Bond through the book-building method.

The three-year bonds would be issued through Barclays Bank, Databank, Stanbic Bank, Fidelity Bank and IC Securities acting as book runners for government.

Government Debt Strategy

The 2020 debt strategy focuses on an appropriate financing mix to mitigate the costs and risks to achieve the desired composition of the public debt portfolio with respect to borrowing from external and domestic sources.

The financing strategy for 2020 proposes issuances of Government securities on the domestic market and creation of cash buffers on top of the programmed net domestic financing for active liability management and cash management purposes.

The strategy is to issue/re-open medium to long-term instruments (2-year, 3-year, 5-year, 7-year, 10-year, 15-year and 20 Year bonds) and refinance some of the maturing Treasury bills and Bonds. The strategy also plans to issue marketable and non-marketable debt against possible contingent liabilities arising from the financial and energy sectors in 2020.